Header Ads

Welcome to New York, Elon $TSLA

The Tesla CEO’s fight with the Securities and Exchange Commission came to a head yesterday in a downtown Manhattan federal court. We’re totally not bitter he didn’t stop by our office for an exclusive. Totally.
Lawyers debated whether Musk was in contempt of court for an inaccurate February tweet about Tesla’s vehicle production. The SEC alleged it violateda $40 million settlement from a previous lawsuit about those “funding secured” tweets.  

But ladies and gentlemen of the jury...

The verdict wasn’t so harsh. Judge Alison Nathan ordered the SEC and Musk to compromise on a new agreement and get back to her in two weeks. Then, she reached deep into her metaphor jar:
  • “It’s not a game, I don’t care if you are a small potato or a big fish.”
  • “My call to action is for everyone to take a deep breath, put your reasonableness pants on and work this out.”
That might be hard for Musk, who has a habit of mooning the SEC. Since their first run-in last year, Musk has called it the “Shortseller Enrichment Commission,” told 60 Minutes he has no respect for the regulators, and tweeted, “Something is broken with SEC oversight.”

Overall, it’s been a rough week

The night before Musk’s hearing, Tesla reported a record decline in deliveries during Q1, down about 31% from the quarter before.
As Bloomberg’s Liam Denning writes, those offputting numbers (with deliveries of the growth-driving Model 3 down by about 20% from the previous quarter) may explain Tesla’s...unpredictable few months. It cut vehicle prices three times, announced two job cuts, and teetered on the cost/benefit analysis of physical storefronts.
Bottom line: The deliveries whiff was enough to sink Tesla junk bonds by the most in seven months and Tesla stock by more than 8%. Not even the judge's slam poetry could mask more pressing questions about the business.
Sign up for Morning Brew

4 comments:

  1. Yeah, I heard Tesla reported a record decline in deliveries during Q1, down about 31% from the quarter before. I may not know how they are taking it but if it was my company, the court hearing would not even go well with us to start with.

    ReplyDelete
  2. I also agree, those offputting numbers may explain Tesla’s unpredictable few months. It's not news that it cut vehicle prices three times, announced two job cuts, and teetered on the cost/benefit analysis of physical storefronts. Oh, come on, that is a lot for just one company in a short time!

    ReplyDelete
  3. Really? The deliveries whiff was enough to sink Tesla stock by more than 8%? That must be huge for them. It's not easy running a business as this and it can be hard when such a thing happens.

    ReplyDelete
  4. True. Not even the judge's slam poetry could mask more pressing questions about the business. It has come a long way and suffering some hits may be normal but I think it can go well with time.

    ReplyDelete