[eduah]

Guidance for this year was 350k - 500k. Elon said several times on the call that he thought they could beat the 500k. This is a technicality on not getting approval for a tweet that could unreasonably be interpreted as saying they are definitely hitting 500k 8 months from now. This is stupid.

https://twitter.com/_jameshatfield_/status/11001772987230945...

[gamblor956]

It's stupid to think that the difference between 350k and 500k is immaterial, especially for a company which struggled to hit the low end of that range the last 2 years.

Tweeting that they definitely would hit the high end of that range, i.e., 500k, i.e., almost 142% of the low-end of the range, was a specific statement about Tesla's capabilities intended to narrow the range of the earlier statements in the interview. Ergo, the tweet was material information and it was reasonable for investors to interpret that Tesla would hit 500k by the end of the year, because it was tweeted by the CEO himself. The clarification about it being a pro-rated (i.e., annualized) number was not provided until much later. (And legally that makes all the difference.)

[jacques_chester]

> This is a technicality

It's the law. That's how it works.

Especially if you agreed to it.

[eduah]

That is the point. He only violated it if you take the obviously wrong interpretation that the 500k was a new material statement. It was not. The agreement only covered new, material information, not repeating a previously given the high-end estimate.

Also, note that the market was closed at the time of the tweet and the second tweet clearing up any possible confusion, thus, having no impact on the stock.

[afastow]

No, he was required to get pre-approval even if he was repeating previously released information verbatim. They probably wouldn't have caught him if he was actually repeating it verbatim, but he still would have been breaking the requirement to get pre-approval.

> According to Tesla’s Policy, any edits to a pre-approved Written Communication or even releasing a verbatim pre-approved Written Communication more than two days after it has been pre-approved requires that the pre-approval be reconfirmed. Even if the exact substance of the 7:15 tweet had been pre-approved 20 days before, Musk cannot credibly claim that he thought he was not required to obtain pre-approval again under the plain terms of the Policy. In fact, the written communication in the 7:15 tweet was not pre-approved 20 days earlier or at any time. Musk’s claim that he thought he was simply restating information from the January 30 communications is not credible.

https://assets.documentcloud.org/documents/5750664/Show-Caus... 12th PDF page (labeled 9 at bottom of page)

[jacques_chester]

You'll note "two days".

[jacques_chester]

> Written Communications that contain, or reasonably could contain, information material to Tesla or its stockholders must, prior to posting or other publication, be submitted to Tesla’s General Counsel and Disclosure Counsel (or in the event of the General Counsel’s unavailability, Tesla’s Chief Financial Officer and Disclosure Counsel) for pre‐approval. Authorized Executives are not authorized to post or publish Written Communications that contain, or reasonably could contain, information material to Tesla or its stockholders without obtaining pre‐approval.

Whether it's new information or not, he was supposed to get approval first.

> Also, note that the market was closed at the time of the tweet and the second tweet clearing up any possible confusion, thus, having no impact on the stock.

Feel free to argue to a judge that the law knocks off overnight.

In any case: the judgement sought by the SEC is for civil contempt for breaking his agreement. It matters that he didn't follow the procedure that he had promised to follow.

[joshuamorton]

350-500k annualized, not 500k for the year.

That exactly what the follow up tweet which was vetted clarifies.

[cat199]

as stupid as tweeting incorrectly and without legal review when tweeting correctly and with review is essentially your simple, easy to observe, 'terms of parole'?

[eduah]

Actual government legal agency going after someone on a stupid immaterial technicality about requiring approval for disclosing material information that might affect stock: The tweet didn't have material information. The 500k number was public and discussed on a public investor call.

vs.

Crazy guy that bankrupted himself trying to build a rocket company and a car company simultaneously is less than overly cautious about his tweeting and how it could be used in bad faith by a government legal agency in the USA to persecute him.

[jacques_chester]

He publicly bragged. That's not "less than overly cautious" behaviour. That's flat out arrogance.

[00N8]

as a former sociology major, I'm pretty sure the judicial system still spends much of its time on cases w/ less merit than this

[minimaxir]

It's now worth noting that this is Elon Musk's defense: https://twitter.com/elonmusk/status/1100215984713957376