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TOV Forums > Today's Reading Links > > Re: Now it's getting worse WSJ: Tesla is in trouble

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atomiclightbulb
Profile for atomiclightbulb
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-13-2018 00:00
Reply to This Message Attach Quote to Reply
owequitit wrote:
superchg2 wrote:
atomiclightbulb wrote:
owequitit wrote:
Further, I have not discredited myself in any way shape or form



You have absolutely discredited yourself.


You stated earlier: http://vtec.net/forums/one-message?message_id=1356513&page_number=8& @ 05-07-2018 01:16

owequitit wrote:Also, as one of the biggest (if not the biggest) single shareholders and creditors, he will be one of the first ones in line to collect if they do go tits up.

Finally, his stock is probably in a higher class, which means he probably has other benefits and rights if something should happen.


Which was proven to be definitively false (by my post in this thread @ 05-07-2018 18:50), because:

(1) Shareholders are LAST in line to recover assets when a company goes bankrupt, and creditors themselves fall into different places in line depending on who they are. (and it was never established that Musk was a major creditor who would be ahead of Suppliers and secured creditors).

(2) Tesla only has 1 class of stock. You didn't even check to see if your information was correct. You assumed that Musk's shares were "probably" in a higher class.


Then, when called out on these basic errors, you responded @ 05-09-2018 00:59:

You might be surprised what I know about businesses and bankruptcy...



Why should anyone on ToV trust ANYTHING you say? You pretend to be knowledgeable about things you know nothing about.


OUCH!



Watch yourself:

https://www.payscale.com/career-news/2016/04/elon-musks-annual-salary-is-less-than-40k

https://cleantechnica.com/2018/03/21/teslas-proposed-compensation-package-elon-musk-approved-split-recommendations/

https://slate.com/technology/2018/01/tesla-compensation-plan-elon-musk-only-paid-ambitious-goals.html

Musk will not get paid for his work unless Tesla reaches a dozen monumental market cap and operational revenue milestones. The company currently has a market cap of $59 billion. Musk’s deal compensates him for every $50 billion increase in market cap, starting with $100 billion and topping at $650 billion.

He also has to increase sales revenue initially to $20 billion and aims to eventually max it out at $175 billion.

If Musk is able to pull of this dazzling financial feat, his reward in stock shares will would be generous. As USA Today writes, “Musk would receive 1 percent of the company up to 12 times over the course of the next 10 years.” If he reaches the maximum goal of $650 billion in market cap, his personal shares would be worth $55 billion, and his electric car company would be worth more than Facebook and Walmart. (Inc notes that Tesla would also blow away all other auto manufacturers since Toyota, currently the largest in the world, has a market cap of about $175 billion.)*


Now, as far as stock options go, I am well aware that "shareholders" are the "last" to be compensated if a company goes tits up. You systemically seem to be forgetting that I do have some finance background, and as such, you might want to check your assumptions that I am an idiot and don't know what I am talking about.

https://www.investopedia.com/university/employee-stock-options-eso/

*the above has several pages explaining them.

https://en.wikipedia.org/wiki/Employee_stock_option

"Options" when speaking of most executive compensation tend to be different than "options" when superficially investing in the market.

https://www.moneycrashers.com/stock-options-trading-basics-call-put-options-explained/

Typically, as with Musk's compensation plan, executives are offered the "option" to buy stock shares when certain metrics are met. They are then able to use that stock for whatever they desire (there may be specific limits as defined in the options and compensation plan). However, once those shares are converted, they become regular shares that the executive can then sell if desired and converted to cash.

*This is specifically why Musk's altruistic surrender of his salary is superficial and a play for market perception. His real compensation comes from the options he holds, and has likely exercised to increase his holdings in Telsa. In fact, one of the articles I linked above mentioned a $1.6 billion option that he previously qualified for, as well as other options marked by events like getting the Model 3 into production, hitting certain volume, market cap metrics, revenue metrics etc.

His new plan designates these options in 12 stages upon reaching certain metrics. If he were to meet all metrics, then the options would be worth a total of $55 billion dollars, which makes his surrender of his salary over the same period chump change.

Now, even if he does NOT meet the metrics, he still gets to keep the options from the previous metrics that he met and exercised. In other words, even if he doesn't make $55 billion off of the deal, he has still made at least $1.6 billion, which is a lot more than what he started with from PayPal.

In most cases, those options have a time horizon on them before the executive is allowed to sell them, so he may not be able to sell the $1.6 billion in stock prior to a certain point in time (it is often a couple of years). However, CEO's sell options all the time as part of their compensation package, and in fact, my CEO just sold several thousand shares for a total of several million dollars. I would assume that in addition to holding some shares back, Musk is most likely selling at least some option shares to maintain personal cashflow. Cashflow that is probably worth more than what he started with, i.e. a net profit.

As discussed in the links, there can also be significant tax benefits to stock options, so even if he was selling them for a reduced amount, the overall effect on his financial picture can easily be in the millions of dollars based on his net worth, the options' worth and other factors. That is money in the bank.

What often happens though, is that CEO's will dump stock prior to market drops and will walk away with the higher cash value while "normal" investors take a bath. How do you think all of the "evil" CEO's walk away from dumpster fires with millions of dollars, while everyone else loses their shirts? It isn't rocket science and I highly doubt Musk is exempt from it.

Like I said, you are more than welcome to post some kind of proof, but so far, you have NOT done that.

https://www.inc.com/lisa-calhoun/elon-musks-new-10x-tesla-compensation-plan-means-one-thing-jobs.html

Roughly 1% of Tesla per year for 12 years.

2 important factors to note:

1) Musk's compensation plan is NOT tied to company profitability. So really, as long as market cap and revenue continue to rise, he still makes money, even if the company doesn't.

2) His new compensation plan does not actually require him to remain CEO of Telsa. He must remain in 1 of 3 roles. CEO, Executive Chairman, or Chief Product Officer.

https://www.marketwatch.com/story/another-tesla-win-elon-musks-compensation-plan-is-executive-pay-done-right-2016-04-22

Further details of Musk's previous compensation plan.

https://www.secform4.com/insider-trading/1494730.htm

*Haven't verified the validity of this one, but this gives you and idea of potential options moves and some exercising. If this is accurate, then the $600 million stock sell is interesting because the one sell is worth a large amount of money. I may take the time to check the SEC database and verify it at some point.

https://www.theverge.com/2018/3/21/17147678/elon-musk-tesla-ceo-compensation-award-plan

More details on the compensation plan.

It is a great political Coup de Grace to make people think he is so altruistic that he is forgoing compensation, but in reality he is not. He has a significant amount of skin in the game and stands to make a LOT of money. He may not make a lot, but he could.

Information on Preferred stock vs Common stock (this is what I was referring to when I said "different class."

https://www.investopedia.com/university/stocks/stocks2.asp

Preferred stock functions similarly to bonds, and usually doesn't come with the voting rights (this may vary depending on the company, but in many cases preferred shareholders do not have any voting rights). With preferred shares, investors are usually guaranteed a fixed dividend in perpetuity. This is different from common stock which has variable dividends that are declared by the board of directors and never guaranteed. In fact, many companies do not pay out dividends to common stock at all.

Another advantage is that in the event of liquidation, preferred shareholders are paid off before the common shareholder (but still after debt holders and other creditors). Preferred stock may also be “callable,” meaning that the company has the option to re-purchase the shares from preferred shareholders at any time for any reason (usually for a premium). An intuitive way to think of these kinds of shares is to see them as being somewhat in between bonds and common shares.

Common and preferred are the two main forms of stock; however, it's also possible for companies to customize different classes of stock to fit the needs of their investors. The most common reason for creating share classes is for the company to keep voting power concentrated with a certain group. Therefore, different classes of shares are given different voting rights. For example, one class of shares would be held by a select group who are given perhaps ten votes per share while a second class would be issued to the majority of investors who are given just one vote per share. When there is more than one class of stock, the classes are traditionally designated as Class A and Class B, etc.. For example, billionaire Warren Buffett’s company Berkshire Hathaway has two classes of stock, represented by placing the letter behind the ticker symbol in a form like this: "BRKa, BRKb" or "BRK.A, BRK.B".


Tesla SEC filings:

http://ir.tesla.com/sec.cfm?view=all

A Form 4 must be filed for principles in the company who acquire or divest interest in the company.

Filed for Musk 3/21/18:

http://files.shareholder.com/downloads/ABEA-4CW8X0/6260256695x0xS1494730%2D18%2D1/1318605/filing.pdf

Filed for Musk 5/07/18:

http://files.shareholder.com/downloads/ABEA-4CW8X0/6260256695x0xS1494730%2D18%2D2/1318605/filing.pdf

* This is most likely the $10 million in shares he bought to spite short owners.

Instructions for Form 4:

https://www.sec.gov/about/forms/form4data.pdf

https://www.nasdaq.com/quotes/sec-insider-form-4.aspx#learn-more

The Form 4 filed in March declares 20,000,000 shares of common stock for Musk pursuant to his new compensation plan. You can see that the value of the shares was $350 and the cost was $0.0.

So while you are basically correct that "shareholders get paid last," it isn't nearly that simple based on the convertible nature of stock options, the ability of Musk to convert large sums of stock while prices are still relatively high (in certain situations) as well as the possibility of any Preferred Stock to generate revenue or return in the event of bankruptcy or liquidation.

Musk owns millions of shares of Tesla, many of which are probably sellable at this point, which means he could quickly convert stock to cash and walk away. That is the nature of options and how CEO's not only earn their compensation in many cases, but have occasionally managed to walk away from a burning wreckage with millions in cash.

This is the CTW filing I have linked articles to previously in this thread:

http://files.shareholder.com/downloads/ABEA-4CW8X0/6260256695x0xS1377739%2D18%2D17/1318605/filing.pdf

There are some concerning positions in this filing:

We urge you to join us in Voting No on the re-election of three directors to the board of Tesla, Inc. at the Annual Meeting on June 5 th , 2018. Over the past year, Tesla has failed to hit critical production milestones and has consequently seen its past progress toward profitability sharply reverse. But instead of recognizing the need for independent and effective board leadership, Tesla has re-nominated three directors who exemplify the company’s failure to evolve:

-Antonio Gracias, a venture capital investor with multiple ties to Elon Musk, lacks the independence to serve as Lead Independent director, and has not initiated the much needed process of board renewal.

-Kimbal Musk - Elon Musk’s brother – shares several of Mr. Gracias’ conflicts, has no professio nal experience in the auto industry, and has proven ineffective as a public company director at Chipotle.

-James Murdoch, the CEO of 21st Century Fox, lacks relevant industry experience, and has been deeply implicated in multiple corporate scandals at Fox and News Corp.

We admire Tesla as successful innovator with an environmental mission; however, its continuing success looks more tenuous than ever. Especially in light of Chairman and CEO Elon Musk’s startling refusal to answer straightforward questions from analysts on a recent investor call, Tesla shareholders need to let the board know that it must raise its game and begin the long-overdue process of renewing its membership and processes by adding currently missing industry, governance, and human capital management expertise.We detail our concerns below.

The CtW Investment Group works with union-sponsored pension funds to enhance long-term stockholder value through active ownership. These funds have over $250 billion in assets under management and are substantial Tesla shareholders.


While Tesla has never reported a profit, going into 2017 shareholders could reasonably believe that the company was on the path to profitability: Tesla trimmed its losses from 22% of revenue in 2015 to just 9.5% in 2016, even as revenue increased 75%. But since the beginning of 2017, Tesla’s financial position has deteriorated along every dimension: its losses increased to 17% of revenue for fiscal 2017, and to 19% for its most rec ent four quarters. Tesla’s operations are burning cash at an accelerating rate, its capital expenditures continue to increase, and its net change in cash ballooned from -$25.3 million for 2017 to -$398.4 million in the first quarter of 2018. Tesla has so far been able to finance these uses of cash by repeatedly issuing new debt and convertible securities, but its continued struggles have made analysts skeptical that the company could do so again. Partly as a result, Tesla’s share price has fallen by approximately 4% since last year’s annual meeting and by 26% since Tesla hit its historical peak in September of last year.


The Wall Street Journal counted more than 20 missed projections by Tesla between 2011 and 2016, with 10 of these targets missed by an average of a year. More recently, Tesla has repeatedly failed to meet targets for the Model 3: Elon Musk originally predicted that the Model 3 would be available in 2017, with sales of 500,000 a year by 2018. In August 2017, this projection was lowered to 20,000 a month by December 2018. In reality, Tesla made only 2,425 Model 3s in the fourth quarter of 2017, and fewer than 10,000 in the first quarter of 2018.
Now, in addition to falling behind schedule, Tesla must grapple with significant manufacturing defects that have necessitated recalls of the 2018 Model S. At the same time, two crashes – one resulting in a fatality - involving Tesla vehicles with Autopilot engaged are under investigation by the National Transportation Safety Board. In mid-April, Tesla announced a halt to production of the Model 3, which had been running at less than 50% of the projected 5,000 cars per week. Karl Brauer of Kelly Blue Book notes that:
The problem is the reality is st arting to stack up, and that’s a reality of accidents the cars have had, quality issues, and massive misses on Model 3 production numbers. You add all that up and there’s a real question about whether this company can deliver what it promises.


Moreover, devel opments in the litigation that followed Tesla’s acquisition of Solar City has only emphasized the need for greater board independence. In March, the Delaware Court of Chancery rejected a motion to dismiss a stockholder suit alleging that Tesla directors including Elon Musk breached their fiduciary duties in approving the Solar City acquisition. The court determined that the plethora of personal and business ties between Elon Musk and the other board members made them potentially less capable of “offer[ing] ... resistance to Musk’s domination and control over the board.”
Given the extensive board conflicts, Elon Musk’s role as Chairman and CEO, and certain supermajority voting requirements, the court concluded that there was a reasonable possibility that Elon Musk could be considered a controlling shareholder. When a controlling shareholder is present, minority shareholders should be especially concerned that the board is genuinely independent, has the experience necessary to question management’s plan s, and will insist on operational and financial discipline.


* This is significant because if a court determines there is a "controlling shareholder" then legal protections provided by being incorporated may not apply in a court of law.

https://seekingalpha.com/article/4168224-musks-personal-finances-threaten-teslas-stock-price?page=2

*subscription alert*

Here is an interesting article about how Musk has borrowed against his shares rather than cash them out. I found that to be interesting.

I may do more research into bond or other debt holdings of Tesla, but it is pretty difficult to say that he doesn't have convertible cash options that become his money once he exercises them.

But the bottom line is that he has derived billions in worth from the options, he has used that money to finance a lavish lifestyle, there are issues about his amount of corporate control, his acquisitions (Solar City) and board makeup are frought with personal relationships, etc.

It isn't nearly the morally clean, altruistic situation you want to pretend it is. He also appears to own a trust (which would be financial advisor advice 101) that holds the majority of his wealth, as those stock options I linked were transferred to it.



What you are saying, in a convoluted manner, is that you believe this: If Tesla is on the brink of financial collapse, Elon Musk will exercise his stock options and sell the shares so that he can escape with large amounts of cash.

There's one big problem with your scenario. Musk has to know that if he did anything like what you describe, he'd end up in prison and also end up forfeiting the loot to the feds. It's illegal for corporate officers like the CEO to trade their company stock based on significant confidential information (such as the company about to be going bankrupt): https://www.sec.gov/fast-answers/answersinsiderhtm.html

If Elon Musk knew that his company was about to go under, but the rest of the markets didn't know and the stock price was high, that would be material, non-public information. Selling the stock based on material, non-public information is securities fraud. People have gone to JAIL for that, including:
- Jeffrey Skilling of Enron, sentenced to 24 years imprisonment
- Joseph Nacchio of Qwest, sentenced to 6 years imprisonment
- Sam Waskal of ImClone, sentenced to 7 years imprisonment (same scandal that swept up Martha Stewart).

Those are just 3 people I can think of at the moment who lost both personal freedom and money after being prosecuted and convicted for securities fraud via insider trading.

You stated previously that you believed that Elon Musk was obsessed with legacy (http://vtec.net/forums/one-message?message_id=1356585&page_number=8& @ 05-09-2018 00:59). Somehow, I doubt that Musk wants his legacy to be sitting in jail for securities fraud.


This is also a far different argument than your previous attempts with regards to "golden parachutes", which you conflated with corporate raiding. See my explanation previously in this thread: http://vtec.net/forums/one-message?message_id=1356585&page_number=8& @ 05-09-2018 19:05


Second, you keep talking about "preferred shares", when I already made it crystal clear, that Tesla has ONE and only ONE class of shares: common stock. Different classes of shares are entirely irrelevant where Tesla is concerned because they DO NOT EXIST.



So sorry, but my credible isn't nearly as damaged as you are trying to portray.


You wrote numerous paragraphs to explain a bad argument. That didn't do your credibility any favors.

atomiclightbulb
Profile for atomiclightbulb
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-13-2018 00:22
Reply to This Message Attach Quote to Reply
owequitit wrote:
First of all, you need to recognize hyperbole.


Yeah, sure. And how much slack have you given TonyE when he perhaps exaggerates the feel and performance of his cars?

You claiming this, seems to me very hypocritical.



Second, they DID work in my initial calculations because the same developmental crashes were included in all of the programs. The line was drawn with some of ULA's rockets, because despite sharing a name, they were fundamentally all new designs. You simply didn't like the metric.

But it doesn't matter now because the metric has still been adjusted to accommodate your position and they are STILL roughly 8 times more likely to splash one than ULA.


You are entitled to evaluate SpaceX's safety probabilities as poor or even unacceptable, but I will point out that the marketplace is willing to accept that level of risk.

SpaceX's launch manifest shows no lack of customers: See http://www.spacex.com/missions, section labeled "future missions".

NASA, Inmarsat, Iridium, USAF, and Sirius XM are among SpaceX's past and future customers. Bangladesh and Arabsat (Saudi Arabia + 20 other Arab nations) are also customers.

owequitit
Profile for owequitit
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-13-2018 01:00
Reply to This Message Attach Quote to Reply
atomiclightbulb wrote:
owequitit wrote:
superchg2 wrote:
atomiclightbulb wrote:
owequitit wrote:
Further, I have not discredited myself in any way shape or form



You have absolutely discredited yourself.


You stated earlier: http://vtec.net/forums/one-message?message_id=1356513&page_number=8& @ 05-07-2018 01:16

owequitit wrote:Also, as one of the biggest (if not the biggest) single shareholders and creditors, he will be one of the first ones in line to collect if they do go tits up.

Finally, his stock is probably in a higher class, which means he probably has other benefits and rights if something should happen.


Which was proven to be definitively false (by my post in this thread @ 05-07-2018 18:50), because:

(1) Shareholders are LAST in line to recover assets when a company goes bankrupt, and creditors themselves fall into different places in line depending on who they are. (and it was never established that Musk was a major creditor who would be ahead of Suppliers and secured creditors).

(2) Tesla only has 1 class of stock. You didn't even check to see if your information was correct. You assumed that Musk's shares were "probably" in a higher class.


Then, when called out on these basic errors, you responded @ 05-09-2018 00:59:

You might be surprised what I know about businesses and bankruptcy...



Why should anyone on ToV trust ANYTHING you say? You pretend to be knowledgeable about things you know nothing about.


OUCH!



Watch yourself:

https://www.payscale.com/career-news/2016/04/elon-musks-annual-salary-is-less-than-40k

https://cleantechnica.com/2018/03/21/teslas-proposed-compensation-package-elon-musk-approved-split-recommendations/

https://slate.com/technology/2018/01/tesla-compensation-plan-elon-musk-only-paid-ambitious-goals.html

Musk will not get paid for his work unless Tesla reaches a dozen monumental market cap and operational revenue milestones. The company currently has a market cap of $59 billion. Musk’s deal compensates him for every $50 billion increase in market cap, starting with $100 billion and topping at $650 billion.

He also has to increase sales revenue initially to $20 billion and aims to eventually max it out at $175 billion.

If Musk is able to pull of this dazzling financial feat, his reward in stock shares will would be generous. As USA Today writes, “Musk would receive 1 percent of the company up to 12 times over the course of the next 10 years.” If he reaches the maximum goal of $650 billion in market cap, his personal shares would be worth $55 billion, and his electric car company would be worth more than Facebook and Walmart. (Inc notes that Tesla would also blow away all other auto manufacturers since Toyota, currently the largest in the world, has a market cap of about $175 billion.)*


Now, as far as stock options go, I am well aware that "shareholders" are the "last" to be compensated if a company goes tits up. You systemically seem to be forgetting that I do have some finance background, and as such, you might want to check your assumptions that I am an idiot and don't know what I am talking about.

https://www.investopedia.com/university/employee-stock-options-eso/

*the above has several pages explaining them.

https://en.wikipedia.org/wiki/Employee_stock_option

"Options" when speaking of most executive compensation tend to be different than "options" when superficially investing in the market.

https://www.moneycrashers.com/stock-options-trading-basics-call-put-options-explained/

Typically, as with Musk's compensation plan, executives are offered the "option" to buy stock shares when certain metrics are met. They are then able to use that stock for whatever they desire (there may be specific limits as defined in the options and compensation plan). However, once those shares are converted, they become regular shares that the executive can then sell if desired and converted to cash.

*This is specifically why Musk's altruistic surrender of his salary is superficial and a play for market perception. His real compensation comes from the options he holds, and has likely exercised to increase his holdings in Telsa. In fact, one of the articles I linked above mentioned a $1.6 billion option that he previously qualified for, as well as other options marked by events like getting the Model 3 into production, hitting certain volume, market cap metrics, revenue metrics etc.

His new plan designates these options in 12 stages upon reaching certain metrics. If he were to meet all metrics, then the options would be worth a total of $55 billion dollars, which makes his surrender of his salary over the same period chump change.

Now, even if he does NOT meet the metrics, he still gets to keep the options from the previous metrics that he met and exercised. In other words, even if he doesn't make $55 billion off of the deal, he has still made at least $1.6 billion, which is a lot more than what he started with from PayPal.

In most cases, those options have a time horizon on them before the executive is allowed to sell them, so he may not be able to sell the $1.6 billion in stock prior to a certain point in time (it is often a couple of years). However, CEO's sell options all the time as part of their compensation package, and in fact, my CEO just sold several thousand shares for a total of several million dollars. I would assume that in addition to holding some shares back, Musk is most likely selling at least some option shares to maintain personal cashflow. Cashflow that is probably worth more than what he started with, i.e. a net profit.

As discussed in the links, there can also be significant tax benefits to stock options, so even if he was selling them for a reduced amount, the overall effect on his financial picture can easily be in the millions of dollars based on his net worth, the options' worth and other factors. That is money in the bank.

What often happens though, is that CEO's will dump stock prior to market drops and will walk away with the higher cash value while "normal" investors take a bath. How do you think all of the "evil" CEO's walk away from dumpster fires with millions of dollars, while everyone else loses their shirts? It isn't rocket science and I highly doubt Musk is exempt from it.

Like I said, you are more than welcome to post some kind of proof, but so far, you have NOT done that.

https://www.inc.com/lisa-calhoun/elon-musks-new-10x-tesla-compensation-plan-means-one-thing-jobs.html

Roughly 1% of Tesla per year for 12 years.

2 important factors to note:

1) Musk's compensation plan is NOT tied to company profitability. So really, as long as market cap and revenue continue to rise, he still makes money, even if the company doesn't.

2) His new compensation plan does not actually require him to remain CEO of Telsa. He must remain in 1 of 3 roles. CEO, Executive Chairman, or Chief Product Officer.

https://www.marketwatch.com/story/another-tesla-win-elon-musks-compensation-plan-is-executive-pay-done-right-2016-04-22

Further details of Musk's previous compensation plan.

https://www.secform4.com/insider-trading/1494730.htm

*Haven't verified the validity of this one, but this gives you and idea of potential options moves and some exercising. If this is accurate, then the $600 million stock sell is interesting because the one sell is worth a large amount of money. I may take the time to check the SEC database and verify it at some point.

https://www.theverge.com/2018/3/21/17147678/elon-musk-tesla-ceo-compensation-award-plan

More details on the compensation plan.

It is a great political Coup de Grace to make people think he is so altruistic that he is forgoing compensation, but in reality he is not. He has a significant amount of skin in the game and stands to make a LOT of money. He may not make a lot, but he could.

Information on Preferred stock vs Common stock (this is what I was referring to when I said "different class."

https://www.investopedia.com/university/stocks/stocks2.asp

Preferred stock functions similarly to bonds, and usually doesn't come with the voting rights (this may vary depending on the company, but in many cases preferred shareholders do not have any voting rights). With preferred shares, investors are usually guaranteed a fixed dividend in perpetuity. This is different from common stock which has variable dividends that are declared by the board of directors and never guaranteed. In fact, many companies do not pay out dividends to common stock at all.

Another advantage is that in the event of liquidation, preferred shareholders are paid off before the common shareholder (but still after debt holders and other creditors). Preferred stock may also be “callable,” meaning that the company has the option to re-purchase the shares from preferred shareholders at any time for any reason (usually for a premium). An intuitive way to think of these kinds of shares is to see them as being somewhat in between bonds and common shares.

Common and preferred are the two main forms of stock; however, it's also possible for companies to customize different classes of stock to fit the needs of their investors. The most common reason for creating share classes is for the company to keep voting power concentrated with a certain group. Therefore, different classes of shares are given different voting rights. For example, one class of shares would be held by a select group who are given perhaps ten votes per share while a second class would be issued to the majority of investors who are given just one vote per share. When there is more than one class of stock, the classes are traditionally designated as Class A and Class B, etc.. For example, billionaire Warren Buffett’s company Berkshire Hathaway has two classes of stock, represented by placing the letter behind the ticker symbol in a form like this: "BRKa, BRKb" or "BRK.A, BRK.B".


Tesla SEC filings:

http://ir.tesla.com/sec.cfm?view=all

A Form 4 must be filed for principles in the company who acquire or divest interest in the company.

Filed for Musk 3/21/18:

http://files.shareholder.com/downloads/ABEA-4CW8X0/6260256695x0xS1494730%2D18%2D1/1318605/filing.pdf

Filed for Musk 5/07/18:

http://files.shareholder.com/downloads/ABEA-4CW8X0/6260256695x0xS1494730%2D18%2D2/1318605/filing.pdf

* This is most likely the $10 million in shares he bought to spite short owners.

Instructions for Form 4:

https://www.sec.gov/about/forms/form4data.pdf

https://www.nasdaq.com/quotes/sec-insider-form-4.aspx#learn-more

The Form 4 filed in March declares 20,000,000 shares of common stock for Musk pursuant to his new compensation plan. You can see that the value of the shares was $350 and the cost was $0.0.

So while you are basically correct that "shareholders get paid last," it isn't nearly that simple based on the convertible nature of stock options, the ability of Musk to convert large sums of stock while prices are still relatively high (in certain situations) as well as the possibility of any Preferred Stock to generate revenue or return in the event of bankruptcy or liquidation.

Musk owns millions of shares of Tesla, many of which are probably sellable at this point, which means he could quickly convert stock to cash and walk away. That is the nature of options and how CEO's not only earn their compensation in many cases, but have occasionally managed to walk away from a burning wreckage with millions in cash.

This is the CTW filing I have linked articles to previously in this thread:

http://files.shareholder.com/downloads/ABEA-4CW8X0/6260256695x0xS1377739%2D18%2D17/1318605/filing.pdf

There are some concerning positions in this filing:

We urge you to join us in Voting No on the re-election of three directors to the board of Tesla, Inc. at the Annual Meeting on June 5 th , 2018. Over the past year, Tesla has failed to hit critical production milestones and has consequently seen its past progress toward profitability sharply reverse. But instead of recognizing the need for independent and effective board leadership, Tesla has re-nominated three directors who exemplify the company’s failure to evolve:

-Antonio Gracias, a venture capital investor with multiple ties to Elon Musk, lacks the independence to serve as Lead Independent director, and has not initiated the much needed process of board renewal.

-Kimbal Musk - Elon Musk’s brother – shares several of Mr. Gracias’ conflicts, has no professio nal experience in the auto industry, and has proven ineffective as a public company director at Chipotle.

-James Murdoch, the CEO of 21st Century Fox, lacks relevant industry experience, and has been deeply implicated in multiple corporate scandals at Fox and News Corp.

We admire Tesla as successful innovator with an environmental mission; however, its continuing success looks more tenuous than ever. Especially in light of Chairman and CEO Elon Musk’s startling refusal to answer straightforward questions from analysts on a recent investor call, Tesla shareholders need to let the board know that it must raise its game and begin the long-overdue process of renewing its membership and processes by adding currently missing industry, governance, and human capital management expertise.We detail our concerns below.

The CtW Investment Group works with union-sponsored pension funds to enhance long-term stockholder value through active ownership. These funds have over $250 billion in assets under management and are substantial Tesla shareholders.


While Tesla has never reported a profit, going into 2017 shareholders could reasonably believe that the company was on the path to profitability: Tesla trimmed its losses from 22% of revenue in 2015 to just 9.5% in 2016, even as revenue increased 75%. But since the beginning of 2017, Tesla’s financial position has deteriorated along every dimension: its losses increased to 17% of revenue for fiscal 2017, and to 19% for its most rec ent four quarters. Tesla’s operations are burning cash at an accelerating rate, its capital expenditures continue to increase, and its net change in cash ballooned from -$25.3 million for 2017 to -$398.4 million in the first quarter of 2018. Tesla has so far been able to finance these uses of cash by repeatedly issuing new debt and convertible securities, but its continued struggles have made analysts skeptical that the company could do so again. Partly as a result, Tesla’s share price has fallen by approximately 4% since last year’s annual meeting and by 26% since Tesla hit its historical peak in September of last year.


The Wall Street Journal counted more than 20 missed projections by Tesla between 2011 and 2016, with 10 of these targets missed by an average of a year. More recently, Tesla has repeatedly failed to meet targets for the Model 3: Elon Musk originally predicted that the Model 3 would be available in 2017, with sales of 500,000 a year by 2018. In August 2017, this projection was lowered to 20,000 a month by December 2018. In reality, Tesla made only 2,425 Model 3s in the fourth quarter of 2017, and fewer than 10,000 in the first quarter of 2018.
Now, in addition to falling behind schedule, Tesla must grapple with significant manufacturing defects that have necessitated recalls of the 2018 Model S. At the same time, two crashes – one resulting in a fatality - involving Tesla vehicles with Autopilot engaged are under investigation by the National Transportation Safety Board. In mid-April, Tesla announced a halt to production of the Model 3, which had been running at less than 50% of the projected 5,000 cars per week. Karl Brauer of Kelly Blue Book notes that:
The problem is the reality is st arting to stack up, and that’s a reality of accidents the cars have had, quality issues, and massive misses on Model 3 production numbers. You add all that up and there’s a real question about whether this company can deliver what it promises.


Moreover, devel opments in the litigation that followed Tesla’s acquisition of Solar City has only emphasized the need for greater board independence. In March, the Delaware Court of Chancery rejected a motion to dismiss a stockholder suit alleging that Tesla directors including Elon Musk breached their fiduciary duties in approving the Solar City acquisition. The court determined that the plethora of personal and business ties between Elon Musk and the other board members made them potentially less capable of “offer[ing] ... resistance to Musk’s domination and control over the board.”
Given the extensive board conflicts, Elon Musk’s role as Chairman and CEO, and certain supermajority voting requirements, the court concluded that there was a reasonable possibility that Elon Musk could be considered a controlling shareholder. When a controlling shareholder is present, minority shareholders should be especially concerned that the board is genuinely independent, has the experience necessary to question management’s plan s, and will insist on operational and financial discipline.


* This is significant because if a court determines there is a "controlling shareholder" then legal protections provided by being incorporated may not apply in a court of law.

https://seekingalpha.com/article/4168224-musks-personal-finances-threaten-teslas-stock-price?page=2

*subscription alert*

Here is an interesting article about how Musk has borrowed against his shares rather than cash them out. I found that to be interesting.

I may do more research into bond or other debt holdings of Tesla, but it is pretty difficult to say that he doesn't have convertible cash options that become his money once he exercises them.

But the bottom line is that he has derived billions in worth from the options, he has used that money to finance a lavish lifestyle, there are issues about his amount of corporate control, his acquisitions (Solar City) and board makeup are frought with personal relationships, etc.

It isn't nearly the morally clean, altruistic situation you want to pretend it is. He also appears to own a trust (which would be financial advisor advice 101) that holds the majority of his wealth, as those stock options I linked were transferred to it.



What you are saying, in a convoluted manner, is that you believe this: If Tesla is on the brink of financial collapse, Elon Musk will exercise his stock options and sell the shares so that he can escape with large amounts of cash.

There's one big problem with your scenario. Musk has to know that if he did anything like what you describe, he'd end up in prison and also end up forfeiting the loot to the feds. It's illegal for corporate officers like the CEO to trade their company stock based on significant confidential information (such as the company about to be going bankrupt): https://www.sec.gov/fast-answers/answersinsiderhtm.html

If Elon Musk knew that his company was about to go under, but the rest of the markets didn't know and the stock price was high, that would be material, non-public information. Selling the stock based on material, non-public information is securities fraud. People have gone to JAIL for that, including:
- Jeffrey Skilling of Enron, sentenced to 24 years imprisonment
- Joseph Nacchio of Qwest, sentenced to 6 years imprisonment
- Sam Waskal of ImClone, sentenced to 7 years imprisonment (same scandal that swept up Martha Stewart).

Those are just 3 people I can think of at the moment who lost both personal freedom and money after being prosecuted and convicted for securities fraud via insider trading.

You stated previously that you believed that Elon Musk was obsessed with legacy (http://vtec.net/forums/one-message?message_id=1356585&page_number=8& @ 05-09-2018 00:59). Somehow, I doubt that Musk wants his legacy to be sitting in jail for securities fraud.


This is also a far different argument than your previous attempts with regards to "golden parachutes", which you conflated with corporate raiding. See my explanation previously in this thread: http://vtec.net/forums/one-message?message_id=1356585&page_number=8& @ 05-09-2018 19:05


Second, you keep talking about "preferred shares", when I already made it crystal clear, that Tesla has ONE and only ONE class of shares: common stock. Different classes of shares are entirely irrelevant where Tesla is concerned because they DO NOT EXIST.



So sorry, but my credible isn't nearly as damaged as you are trying to portray.


You wrote numerous paragraphs to explain a bad argument. That didn't do your credibility any favors.



Wrong again, and again, you are putting words in my mouth.

What I have proven here is that at least some of Musk's shares have a buy value of $0 (they were essentially given to him, and I don't care enough to go verify the rest).

What that means is that even if they are only worth a dollar (probably only likely in the event of a bankruptcy, and only then probably after filing) these options would still be worth many millions.

You are correct that there ARE laws against using confidential information ahead of time to sell stock BEFORE said information is made public (such as a looming bankruptcy filing), but after said information is released, then it is pretty much fair game and executives do it all the time. In fact, if they were always limited by confidential information, they would never be able to excercise options because there is always confidential information.

So using the example above, using knowledge of an impending bankruptcy to decide to sell stock before the announcement is made would be "insider trading" as would Musk buying a ton of Tesla stock based on knowledge that it would greatly increase in value (if they were to say be bought by Apple in a stock swap) that had not yet been made public.

However, once it is public, it is just trading.

So what I am saying is that any options that Musk has already exercised and any shares that he owns outright, could be traded away as soon as the information was made public, just as any other shareholder would do. Since the drop is not instantaneous and the originating value on at least some of the options was zero, any money gained from a LEGAL sale at any price would be worth a significant amount of money. Since Musk currently holds about 20% of Tesla stock, with a market cap of roughly $50 billion, that would make Musk's shares worth approximately $6-10 billion depending on who you talk to. The point is that if the buy value for him was nothing, then even if it dropped by half or two thirds before he sold it, it would still be worth billions.

However, realistically, I think it is more likely they would just be purchased by someone else and he would either cash out or take a share of the new owner.

It is also worth mentioning that I have NOT said that he would retain his full value. Say that Tesla files at the end of the year. He would lose any value from the time they declared and the time his transaction went through, and he would lose whatever value was associated with whatever options he either wasn't able to sell yet, or hadn't been vested. That is just how the game is played. However, suffice it to say, there are multiple ways that are perfectly legal where he ends up with billions and the rest of the shareholders lose their shorts. Especially the ones that invest in Tesla blindly based on a faith that he will change the world, even though the financial metrics are not there.

The fact that he is taking out loans and using the shares as collateral (as provided in my previous Seeking Alpha link) is even more ingenious because it accomplishes several things. First, it allows him to keep his squeaky clean public image. Second, it allows him to borrow large sums of money based on the shares' worth. Finally, depending how the loan contracts are arranged, if the stock goes belly up, he may be able to just walk away with his billions in loans (I think the Seeking Alpha article showed about $3-4 billion in loans) and the creditor holds the shares, even if they are worth less. Even if the creditors only allowed him to borrow a certain % of that in order to protect their risk, it is still a pretty brilliant move on his part.

If they are bought out and there is a share swap, then he just ends up with the same amount of value in the new company, and likely a large % of the vote as a result.

Or Tesla succeeds and his new share options become worth about $55 billion, on top of what he already holds.

No matter which one happens, it is HIGHLY unlikely that Musk walks away empty handed, even if the majority of shareholders do. Like I said, in 100% of history, the people calling the shots very rarely ever walk away empty handed.

Also, you are misusing my definition of "golden parachute" which does NOT imply insider trading, which is why your previous refutation was wrong and didn't actually refute what I was saying.

"Golden parachute" refers to an exit compensation plan where a company goes tits up, but the top leadership still reaps significant financial reward. It is a metaphor that they do not go down with the burning wreckage of an airplane and the chute is literally made of money.

I am happy that you can link the Enron people, but I am already aware of all of those convictions and I am also aware that they were overtly fraudulent in their business conduct.

I have not said Musk is. I simply think Musk is selling a lot of hype and hot air (neither of which are illegal) and is handsomely profiting from it.

So let me give you some examples of actual "golden parachutes" that didn't involve criminal conduct.

Continental Airlines (1980ish) - Frank Lorenzo came in and slashed costs by running the company through bankruptcy. He voided union contracts (resulting in Congressional change to union laws that prohibit anyone other than a federal court from voiding them) and sent creditors home with pennies on the dollar. In the process, he ended up with a large % of the company and reaped the rewards financially when the company recovered.

He then purchased Eastern Airlines in 1986 and instituted a program of crushing the unions into submission. When that failed because of the bankruptcy laws he had caused to change, he started transferring assets to his non-union company (Continental) and leasing them back to Eastern at a loss for Eastern and a gain for Continental. When the unions exhausted the RLA process and were released to strike, he staffed the company with scabs and continued to take assets while the airline flew. He transferred planes, computer technology, routes, hubs, and whole regional airlines into Continental. When Eastern finally had no choice but to file bankruptcy, he walked away with his Continental holdings intact and billions in new assets that used to belong to Eastern Airlines. The employees and shareholders of Eastern got the shaft.

Then, in 1994 after his henchmen had run Continental into the ground and they went bankrupt again (as part of a forced management change), he remained a major shareholder, kept his flight benefits for life and still ended up millions richer.

When United and AA filed bankruptcy (as well as Delta), the CEO's ALL walked away with packages worth millions and millions of dollars while the shareholders, taxpayers and employees all footed the bills.

Same thing with the market crash in 2008. Many of the executives that had directly caused it kept their millions because they had broken no laws in doing so.

Wells Fargo and their account scamming scandal is another prime example. Stumpf and most of the other executives retired and kept their money.

The list literally goes on and on and on. It is why NickGravesX talks about the "banksters" all the time.

So sorry, but you are misapplying my statement to mean "illegal" when it just means "immoral, but legal."

My credibility is still perfectly intact. But thanks anyway.


owequitit
Profile for owequitit
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-13-2018 01:09
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atomiclightbulb wrote:
owequitit wrote:
First of all, you need to recognize hyperbole.


Yeah, sure. And how much slack have you given TonyE when he perhaps exaggerates the feel and performance of his cars?

You claiming this, seems to me very hypocritical.



Second, they DID work in my initial calculations because the same developmental crashes were included in all of the programs. The line was drawn with some of ULA's rockets, because despite sharing a name, they were fundamentally all new designs. You simply didn't like the metric.

But it doesn't matter now because the metric has still been adjusted to accommodate your position and they are STILL roughly 8 times more likely to splash one than ULA.


You are entitled to evaluate SpaceX's safety probabilities as poor or even unacceptable, but I will point out that the marketplace is willing to accept that level of risk.

SpaceX's launch manifest shows no lack of customers: See http://www.spacex.com/missions, section labeled "future missions".

NASA, Inmarsat, Iridium, USAF, and Sirius XM are among SpaceX's past and future customers. Bangladesh and Arabsat (Saudi Arabia + 20 other Arab nations) are also customers.



I didn't use the term "poor" or "unacceptable," so not sure where you got that from. I may have used that a couple of years ago when their launch record % was far worse, but that doesn't apply to this thread today.

However that does not change the fact that as of today, they are 8 times more likely to lose a payload vs ULA.

Of course, let's not forget that both ULA and Ariane both have plenty of customers, and ULA's Vulcan should also help that.

Also, don't forget that SpaceX got the piece of the DOD pie (and possibly NASA) because he created a public outcry that it wasn't "fair."

I also never made any claim that he was short on customers, so that is another non-sequitur. What I DID say was that the price, thus far, for that cheaper launch cost is a higher loss rate.

You are trying to imply a lot of meaning that isn't there.

owequitit
Profile for owequitit
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-13-2018 01:14
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Tesla seeing an exodus of high profile executives:

https://www.thestreet.com/technology/important-tesla-executives-are-running-out-the-door-14587861?puc=yahoo&cm_ven=YAHOO&yptr=yahoo


owequitit
Profile for owequitit
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-13-2018 01:22
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Another Model S crash in Utah yesterday. It will be interesting to see if the NTSB takes this one too:

https://finance.yahoo.com/news/tesla-autopilot-slams-truck-stopped-224808449.html

SOUTH JORDAN, Utah (AP) — A Tesla sedan with a semi-autonomous Autopilot feature has rear-ended a fire department truck at 60 mph (97 kph) apparently without braking before impact, but police say it's unknown if the Autopilot feature was engaged.

The cause of the Friday evening crash, involving a Tesla Model S and a fire department mechanic truck stopped at a red light, was under investigation, said police in South Jordan, a suburb of Salt Lake City.

The crash, in which the Tesla driver was injured, comes as federal safety agencies investigate the performance of Tesla's semi-autonomous driving system.

The Tesla's air bags were activated in the crash, South Jordan police Sgt. Samuel Winkler said Saturday. The Tesla's driver suffered a broken right ankle, and the driver of the Unified Fire Authority mechanic truck didn't require treatment, Winkler said.

There was no indication the Tesla's driver was under the influence of any substance, and information on what the driver may have told investigators about the circumstances of the crash likely wouldn't be available before Monday, Winkler said by telephone.

There was light rain falling and roads were wet when the crash occurred, police said in a statement.

"Witnesses indicated the Tesla Model S did not brake prior to impact," the statement said.

Tesla's Autopilot system uses cameras, radar and computers to keep speed, change lanes and automatically stop vehicles. The company, which is based in Palo Alto, California, and has a huge battery factory in the Reno, Nevada, area, tells drivers the system requires them to keep their eyes on the road and their hands on the wheel so they can take control to avoid accidents.

Police said they had been in contact with the National Transportation Safety Board about the crash. NTSB spokesman Keith Holloway said he didn't know whether the agency would get involved with the crash.

Tesla did not immediately respond to inquiries from The Associated Press.

The NTSB and the National Highway Traffic Safety Administration are investigating at least two other crashes involving Tesla vehicles. In March, a Tesla Model X SUV crashed on a California highway, killing the driver, and investigators are looking into the performance of the semi-autonomous driving system in that crash.

atomiclightbulb
Profile for atomiclightbulb
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-13-2018 08:42
Reply to This Message Attach Quote to Reply
owequitit wrote:
atomiclightbulb wrote:
owequitit wrote:
First of all, you need to recognize hyperbole.


Yeah, sure. And how much slack have you given TonyE when he perhaps exaggerates the feel and performance of his cars?

You claiming this, seems to me very hypocritical.



Second, they DID work in my initial calculations because the same developmental crashes were included in all of the programs. The line was drawn with some of ULA's rockets, because despite sharing a name, they were fundamentally all new designs. You simply didn't like the metric.

But it doesn't matter now because the metric has still been adjusted to accommodate your position and they are STILL roughly 8 times more likely to splash one than ULA.


You are entitled to evaluate SpaceX's safety probabilities as poor or even unacceptable, but I will point out that the marketplace is willing to accept that level of risk.

SpaceX's launch manifest shows no lack of customers: See http://www.spacex.com/missions, section labeled "future missions".

NASA, Inmarsat, Iridium, USAF, and Sirius XM are among SpaceX's past and future customers. Bangladesh and Arabsat (Saudi Arabia + 20 other Arab nations) are also customers.



I didn't use the term "poor" or "unacceptable," so not sure where you got that from. I may have used that a couple of years ago when their launch record % was far worse, but that doesn't apply to this thread today.

You are trying to imply a lot of meaning that isn't there.



Definitely NOT a "couple years ago".

Less than 1 year ago: http://vtec.net/forums/one-message?message_id=1322717&page_number=3& @ 07-10-2017 23:47

You wrote:

owequitit wrote:
SpaceX's safety record leaves a lot to be desired. But, I am going to go out on a limb and guess that you don't condone airlines killing people, companies spilling chemicals and oil spills in the interest of cost savings, so I am curious why you are so quick to pull the "SpaceX is cheaper" card when it involves Musk?

If a safety record sucks and leads to catastrophic problems, then it sucks and leads to catastrophic problems. I don't make exceptions for my personal heroes.

As I have asserted here before, SpaceX's success record leaves a lot to be desired.


"leaves a lot to be desired"
"sucks"

Which is basically another way of saying 'poor' or 'unacceptable'.

You've been fairly open about your complete contempt for SpaceX's safety record. Pretending otherwise is dishonest.

atomiclightbulb
Profile for atomiclightbulb
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-13-2018 09:25
Reply to This Message Attach Quote to Reply
owequitit wrote:
Wrong again, and again, you are putting words in my mouth.

What I have proven here is that at least some of Musk's shares have a buy value of $0 (they were essentially given to him, and I don't care enough to go verify the rest).

What that means is that even if they are only worth a dollar (probably only likely in the event of a bankruptcy, and only then probably after filing) these options would still be worth many millions.

You are correct that there ARE laws against using confidential information ahead of time to sell stock BEFORE said information is made public (such as a looming bankruptcy filing), but after said information is released, then it is pretty much fair game and executives do it all the time. In fact, if they were always limited by confidential information, they would never be able to excercise options because there is always confidential information.

So using the example above, using knowledge of an impending bankruptcy to decide to sell stock before the announcement is made would be "insider trading" as would Musk buying a ton of Tesla stock based on knowledge that it would greatly increase in value (if they were to say be bought by Apple in a stock swap) that had not yet been made public.

However, once it is public, it is just trading.

So what I am saying is that any options that Musk has already exercised and any shares that he owns outright, could be traded away as soon as the information was made public, just as any other shareholder would do. Since the drop is not instantaneous and the originating value on at least some of the options was zero, any money gained from a LEGAL sale at any price would be worth a significant amount of money. Since Musk currently holds about 20% of Tesla stock, with a market cap of roughly $50 billion, that would make Musk's shares worth approximately $6-10 billion depending on who you talk to. The point is that if the buy value for him was nothing, then even if it dropped by half or two thirds before he sold it, it would still be worth billions.


You appear to be unaware that once really bad information becomes public, AI computer trading systems ("algobots") can and will react within fractions of a second.

There are 2 consequences to this:

(1) Musk wouldn't be able to cash out faster than Wall Street's computers can crush a stock price.

(2) Even if Musk tried to cash out, putting tens of MILLIONS of shares for sale ASAP would massively increase supply, which would further collapse any remaining value in the stock. The news of the CEO trying to dump a huge % shares, in of itself, would tank the stock price as algobots react almost instantaneously to this kind of news.

An example of how quickly a stock price can collapse is GTAT, which lost close to 90% of its market cap when news broke that they lost a supplier deal with Apple: http://www.businessinsider.com/gt-advanced-files-for-bankruptcy-oct-6-2014-10?r=US&IR=T&IR=T. The company was bankrupt, and the stock essentially worthless, by the end of that week.



However, realistically, I think it is more likely they would just be purchased by someone else and he would either cash out or take a share of the new owner.

It is also worth mentioning that I have NOT said that he would retain his full value. Say that Tesla files at the end of the year. He would lose any value from the time they declared and the time his transaction went through, and he would lose whatever value was associated with whatever options he either wasn't able to sell yet, or hadn't been vested. That is just how the game is played. However, suffice it to say, there are multiple ways that are perfectly legal where he ends up with billions and the rest of the shareholders lose their shorts. Especially the ones that invest in Tesla blindly based on a faith that he will change the world, even though the financial metrics are not there.

The fact that he is taking out loans and using the shares as collateral (as provided in my previous Seeking Alpha link) is even more ingenious because it accomplishes several things. First, it allows him to keep his squeaky clean public image. Second, it allows him to borrow large sums of money based on the shares' worth. Finally, depending how the loan contracts are arranged, if the stock goes belly up, he may be able to just walk away with his billions in loans (I think the Seeking Alpha article showed about $3-4 billion in loans) and the creditor holds the shares, even if they are worth less. Even if the creditors only allowed him to borrow a certain % of that in order to protect their risk, it is still a pretty brilliant move on his part.

If they are bought out and there is a share swap, then he just ends up with the same amount of value in the new company, and likely a large % of the vote as a result.

Or Tesla succeeds and his new share options become worth about $55 billion, on top of what he already holds.

No matter which one happens, it is HIGHLY unlikely that Musk walks away empty handed, even if the majority of shareholders do. Like I said, in 100% of history, the people calling the shots very rarely ever walk away empty handed.



You cannot be serious.

In the bankruptcy scenario, Musk would walk away with loans (he currently has borrowings and credit of $624 million, which is secured with shares of Tesla).

But loans have to be repaid.

The money is owed to Morgan Stanley and Goldman Sachs, according to a 2017 insideEVs article: https://insideevs.com/elon-musks-borrowing-hundreds-millions-questioned/

Musk would be unlikely to walk away with "billions" or even "millions".

Depending on the terms of the loan agreement, Morgan Stanley and Goldman Sachs could be entitled not just to get Tesla stock, but also collect any deficiency balance in order to get repaid on the loan. They would probably sue Musk in court for repayment, and have his remaining assets seized if they were able to win the lawsuit.


Also, if Tesla was bought out by another company via a share exchange agreement, existing shareholders wouldn't be wiped out. They would get shares in the company that bought Tesla.


Also, you are misusing my definition of "golden parachute" which does NOT imply insider trading, which is why your previous refutation was wrong and didn't actually refute what I was saying.

"Golden parachute" refers to an exit compensation plan where a company goes tits up, but the top leadership still reaps significant financial reward. It is a metaphor that they do not go down with the burning wreckage of an airplane and the chute is literally made of money.

I am happy that you can link the Enron people, but I am already aware of all of those convictions and I am also aware that they were overtly fraudulent in their business conduct.

I have not said Musk is. I simply think Musk is selling a lot of hype and hot air (neither of which are illegal) and is handsomely profiting from it.

So let me give you some examples of actual "golden parachutes" that didn't involve criminal conduct.

Continental Airlines (1980ish) - Frank Lorenzo came in and slashed costs by running the company through bankruptcy. He voided union contracts (resulting in Congressional change to union laws that prohibit anyone other than a federal court from voiding them) and sent creditors home with pennies on the dollar. In the process, he ended up with a large % of the company and reaped the rewards financially when the company recovered.

He then purchased Eastern Airlines in 1986 and instituted a program of crushing the unions into submission. When that failed because of the bankruptcy laws he had caused to change, he started transferring assets to his non-union company (Continental) and leasing them back to Eastern at a loss for Eastern and a gain for Continental. When the unions exhausted the RLA process and were released to strike, he staffed the company with scabs and continued to take assets while the airline flew. He transferred planes, computer technology, routes, hubs, and whole regional airlines into Continental. When Eastern finally had no choice but to file bankruptcy, he walked away with his Continental holdings intact and billions in new assets that used to belong to Eastern Airlines. The employees and shareholders of Eastern got the shaft.

Then, in 1994 after his henchmen had run Continental into the ground and they went bankrupt again (as part of a forced management change), he remained a major shareholder, kept his flight benefits for life and still ended up millions richer.

When United and AA filed bankruptcy (as well as Delta), the CEO's ALL walked away with packages worth millions and millions of dollars while the shareholders, taxpayers and employees all footed the bills.

Same thing with the market crash in 2008. Many of the executives that had directly caused it kept their millions because they had broken no laws in doing so.

Wells Fargo and their account scamming scandal is another prime example. Stumpf and most of the other executives retired and kept their money.

The list literally goes on and on and on. It is why NickGravesX talks about the "banksters" all the time.

So sorry, but you are misapplying my statement to mean "illegal" when it just means "immoral, but legal."

My credibility is still perfectly intact. But thanks anyway.




You are still confusing corporate raiding with executive compensation contract clauses.

Your credibility today: still zip.


KaizenDo
Profile for KaizenDo
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-13-2018 12:02
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Interestingly enough the Tesla S crashed into a firetruck. Probably it's onboard system recognized the fire engine as safest place to crash in case the car bursts up in flames again.
superchg2
Profile for superchg2
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-13-2018 14:29
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KaizenDo wrote:
Interestingly enough the Tesla S crashed into a firetruck. Probably it's onboard system recognized the fire engine as safest place to crash in case the car bursts up in flames again.

Except that water doesn't seem to do too much against the lithium ion batteries.

owequitit
Profile for owequitit
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-14-2018 02:27
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atomiclightbulb wrote:
owequitit wrote:
atomiclightbulb wrote:
owequitit wrote:
First of all, you need to recognize hyperbole.


Yeah, sure. And how much slack have you given TonyE when he perhaps exaggerates the feel and performance of his cars?

You claiming this, seems to me very hypocritical.



Second, they DID work in my initial calculations because the same developmental crashes were included in all of the programs. The line was drawn with some of ULA's rockets, because despite sharing a name, they were fundamentally all new designs. You simply didn't like the metric.

But it doesn't matter now because the metric has still been adjusted to accommodate your position and they are STILL roughly 8 times more likely to splash one than ULA.


You are entitled to evaluate SpaceX's safety probabilities as poor or even unacceptable, but I will point out that the marketplace is willing to accept that level of risk.

SpaceX's launch manifest shows no lack of customers: See http://www.spacex.com/missions, section labeled "future missions".

NASA, Inmarsat, Iridium, USAF, and Sirius XM are among SpaceX's past and future customers. Bangladesh and Arabsat (Saudi Arabia + 20 other Arab nations) are also customers.



I didn't use the term "poor" or "unacceptable," so not sure where you got that from. I may have used that a couple of years ago when their launch record % was far worse, but that doesn't apply to this thread today.

You are trying to imply a lot of meaning that isn't there.



Definitely NOT a "couple years ago".

Less than 1 year ago: http://vtec.net/forums/one-message?message_id=1322717&page_number=3& @ 07-10-2017 23:47

You wrote:

owequitit wrote:
SpaceX's safety record leaves a lot to be desired. But, I am going to go out on a limb and guess that you don't condone airlines killing people, companies spilling chemicals and oil spills in the interest of cost savings, so I am curious why you are so quick to pull the "SpaceX is cheaper" card when it involves Musk?

If a safety record sucks and leads to catastrophic problems, then it sucks and leads to catastrophic problems. I don't make exceptions for my personal heroes.

As I have asserted here before, SpaceX's success record leaves a lot to be desired.


"leaves a lot to be desired"
"sucks"

Which is basically another way of saying 'poor' or 'unacceptable'.

You've been fairly open about your complete contempt for SpaceX's safety record. Pretending otherwise is dishonest.



Don't take my statements out of context and then tell me I lack credibility. To stop your circular non-sense here and now, I have posted the ENTIRE post right here again.

This is the last post on the matter because you simply are engaging in ad hominem attack because you can no longer validly refute the basic premises of my statements. It reaks of desperation and I am done with it. Good luck and God Speed. At this point, you really haven't challenged my credibility and I frankly don't care if you think you have.

Again economics didn't enter the equation. We were discussing, and I was very specifically, sticking to the safety aspect because that is where the thread went.

SpaceX's safety record leaves a lot to be desired. But, I am going to go out on a limb and guess that you don't condone airlines killing people, companies spilling chemicals and oil spills in the interest of cost savings, so I am curious why you are so quick to pull the "SpaceX is cheaper" card when it involves Musk?

If a safety record sucks and leads to catastrophic problems, then it sucks and leads to catastrophic problems. I don't make exceptions for my personal heroes.

Now, let's talk about the hype in SpaceX's claims:

http://www.airspacemag.com/space/is-spacex-changing-the-rocket-equation-132285884/

http://spacenews.com/spacexs-reusable-falcon-9-what-are-the-real-cost-savings-for-customers/

https://arstechnica.com/science/2017/06/air-force-budget-reveals-how-much-spacex-undercuts-launch-prices/

http://www.gao.gov/assets/670/661330.pdf

http://fortune.com/2017/06/17/spacex-launch-cost-competition/

https://www.engadget.com/2017/06/16/us-air-force-spacex-ula-launch-costs/

https://www.bizjournals.com/denver/blog/boosters_bits/2014/05/ulas-per-launch-costs-rival-spacex-and-its-a.html

Current estimates put SpaceX's actual launch cost about 1/2 of that of ULS. The problem is that ULS has a much better safety record. Of course, you would expect that cost to go somewhere, and admittedly ULS HAS lowered costs since SpaceX started competing for contracts.

Here is the sticking point to Musk's claims. Inconvenient for SpaceX, I know, but the reality is that on more expensive and sensitive projects it is actually cheaper to pay ULS to do it based on their record.

If I am launching a $300 million satellite, than it might be worth it to pay the difference to have ULS launch it. Considering that some satellites cost in the billions of dollars, ULS becomes a no-brainer from a risk standpoint.

http://nation.time.com/2012/05/21/how-much-does-gps-cost/

http://www.globalcomsatphone.com/hughesnet/satellite/costs.html

https://www.space.com/28926-air-force-launches-gps-satellite.html

https://www.space.com/19794-navstar.html

So there are a couple of big questions.

1) How is SpaceX going to improve their launch record while keeping their costs low? ULS' launch record over a couple of decades didn't happen by mistake or luck.

2) How much does it REALLY cost SpaceX to launch a satellite? Are they sandbagging to gain market share? If not, what do cost projections look like going forward?

3) I am skeptical of Musk's overly simplistic design claims (which makes easy fodder for his blind faithful) based on the fact that if it were easy to just use the same parts over and over, surely someone else would have thought about it based on the fact that it has been done all over every industry. Of course, they talk upfront about how Musk's focus is more on cost, versus performance.

4) How well does SpaceX do going forward, considering they seem to be limited to LEO missions? Sure, they can scale it up, add payload, add thrust, add performance, add capability. Guess what? That ALL adds cost. So if Musk builds a rocket with identical performance and identical safety to, say the Delta, what are SpaceX's costs?

5) I'll say this flat out. SpaceX better drive that success rate about 100 times higher if he is serious about commercialization of space. If aviation has taught us anything, it is that consumers don't accept a false pretense of safety.

As I have asserted here before, SpaceX's success record leaves a lot to be desired.


1) I didn't say "unacceptable." I said "leaves a lot to be desired." Don't go trying to put words in my mouth and imply things I didn't way when you get pissed off whenever you perceive someone else doing it to you.

That said "leaves a lot to be desired" was substantiated with plenty of links and calculations.

As of the date I made that post, SpaceX had launched 38 rockets. Even using YOUR metric of losses (which I STILL do NOT agree with), they had 2 total failures in 38 launches or a loss rate of 1:19.

https://en.wikipedia.org/wiki/List_of_Falcon_9_and_Falcon_Heavy_launches

On that same date, ULA had completed 70 Atlas V launches, 35 Delta IV's and 98 Delta II launches with no losses.

http://www.spaceflightinsider.com/hangar/delta-ii/

https://www.ulalaunch.com/missions/delta-2/1

https://en.wikipedia.org/wiki/Atlas_V

https://en.wikipedia.org/wiki/Delta_IV

Since I wrote that post, SpaceX has launched an additional 16 operational missions (I excluded the Falcon Heavy test flight), going from a total of 39 with 2 failures to 54 with 2 failures. In short, they have launched 30% of their total flights since I made that post.

On the day I made that post, their loss rate was 1:19 (using your metric). That 30% increase in launches (all successful) changed that data from 1:19 to 1:27 or a 42% improvement in launch success rate.

The problem here is two fold:

1) You are incorrectly attempting to apply meaning to words that I did not use. When I said "a lot to be desired," it was an accurate statement. At the time I said that, SpaceX's failure rate was 1:19, while ULA's was 0:70 just for Atlas V. Assuming they had lost the very next launch, and had a failure rate of 1:71, SpaceX STILL would have had roughly a loss rate that was 4x higher than just the Atlas V program. However, ULA did not. They have subsequently launched 7 more Atlas V rockets with zero failures.

If we look at ULA's record all inclusive on the date I made that post, it was 0:203 launches. Assuming ULA had splashed the next mission and got a loss rate of 1:204, the SpaceX loss rate would have been just shy of 11x higher than ULA. But ULA didn't splash one. They are now up to about 213 successful missions, leaving a total rate that is about 1/8 that of SpaceX with the subsequently successful launches, as already calculated in this thread.

That was all previously calculated, and those are all adjusted to YOUR requirements, which I do NOT agree with. The sources of data have been linked. Adjustments have been made to agree with your demand for fairness. Everything is transparently laid out. Everything has been clearly defined, supported and linked.

2) You keep going around in circles to the point where you are now accusing me of applying meaning that I didn't imply (which you overtly admitted in your response above).

I DID say "leaves a lot to be desired" I did not say "unacceptable." Two totally different things. That said, when someone's loss rate is 8-11x higher than someone else's in the same field, it is absolutely fair to say that their record leaves a lot to be desired, so I fully stand behind the statement I actually made.

But that isn't the MAIN problem. The MAIN problem is that you are so desperate to discredit me that you have now openly resorted to trying to apply meaning to my statements that is not there. That isn't killing my credibility. It is killing YOURS.

*Oh by the way, look at all of those valid links in just that one post that support my statements...

Goodbye. The conversation is done.


owequitit
Profile for owequitit
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-14-2018 03:04
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atomiclightbulb wrote:
owequitit wrote:
Wrong again, and again, you are putting words in my mouth.

What I have proven here is that at least some of Musk's shares have a buy value of $0 (they were essentially given to him, and I don't care enough to go verify the rest).

What that means is that even if they are only worth a dollar (probably only likely in the event of a bankruptcy, and only then probably after filing) these options would still be worth many millions.

You are correct that there ARE laws against using confidential information ahead of time to sell stock BEFORE said information is made public (such as a looming bankruptcy filing), but after said information is released, then it is pretty much fair game and executives do it all the time. In fact, if they were always limited by confidential information, they would never be able to excercise options because there is always confidential information.

So using the example above, using knowledge of an impending bankruptcy to decide to sell stock before the announcement is made would be "insider trading" as would Musk buying a ton of Tesla stock based on knowledge that it would greatly increase in value (if they were to say be bought by Apple in a stock swap) that had not yet been made public.

However, once it is public, it is just trading.

So what I am saying is that any options that Musk has already exercised and any shares that he owns outright, could be traded away as soon as the information was made public, just as any other shareholder would do. Since the drop is not instantaneous and the originating value on at least some of the options was zero, any money gained from a LEGAL sale at any price would be worth a significant amount of money. Since Musk currently holds about 20% of Tesla stock, with a market cap of roughly $50 billion, that would make Musk's shares worth approximately $6-10 billion depending on who you talk to. The point is that if the buy value for him was nothing, then even if it dropped by half or two thirds before he sold it, it would still be worth billions.


You appear to be unaware that once really bad information becomes public, AI computer trading systems ("algobots") can and will react within fractions of a second.

There are 2 consequences to this:

(1) Musk wouldn't be able to cash out faster than Wall Street's computers can crush a stock price.

(2) Even if Musk tried to cash out, putting tens of MILLIONS of shares for sale ASAP would massively increase supply, which would further collapse any remaining value in the stock. The news of the CEO trying to dump a huge % shares, in of itself, would tank the stock price as algobots react almost instantaneously to this kind of news.

An example of how quickly a stock price can collapse is GTAT, which lost close to 90% of its market cap when news broke that they lost a supplier deal with Apple: http://www.businessinsider.com/gt-advanced-files-for-bankruptcy-oct-6-2014-10?r=US&IR=T&IR=T. The company was bankrupt, and the stock essentially worthless, by the end of that week.



However, realistically, I think it is more likely they would just be purchased by someone else and he would either cash out or take a share of the new owner.

It is also worth mentioning that I have NOT said that he would retain his full value. Say that Tesla files at the end of the year. He would lose any value from the time they declared and the time his transaction went through, and he would lose whatever value was associated with whatever options he either wasn't able to sell yet, or hadn't been vested. That is just how the game is played. However, suffice it to say, there are multiple ways that are perfectly legal where he ends up with billions and the rest of the shareholders lose their shorts. Especially the ones that invest in Tesla blindly based on a faith that he will change the world, even though the financial metrics are not there.

The fact that he is taking out loans and using the shares as collateral (as provided in my previous Seeking Alpha link) is even more ingenious because it accomplishes several things. First, it allows him to keep his squeaky clean public image. Second, it allows him to borrow large sums of money based on the shares' worth. Finally, depending how the loan contracts are arranged, if the stock goes belly up, he may be able to just walk away with his billions in loans (I think the Seeking Alpha article showed about $3-4 billion in loans) and the creditor holds the shares, even if they are worth less. Even if the creditors only allowed him to borrow a certain % of that in order to protect their risk, it is still a pretty brilliant move on his part.

If they are bought out and there is a share swap, then he just ends up with the same amount of value in the new company, and likely a large % of the vote as a result.

Or Tesla succeeds and his new share options become worth about $55 billion, on top of what he already holds.

No matter which one happens, it is HIGHLY unlikely that Musk walks away empty handed, even if the majority of shareholders do. Like I said, in 100% of history, the people calling the shots very rarely ever walk away empty handed.



You cannot be serious.

In the bankruptcy scenario, Musk would walk away with loans (he currently has borrowings and credit of $624 million, which is secured with shares of Tesla).

But loans have to be repaid.

The money is owed to Morgan Stanley and Goldman Sachs, according to a 2017 insideEVs article: https://insideevs.com/elon-musks-borrowing-hundreds-millions-questioned/

Musk would be unlikely to walk away with "billions" or even "millions".

Depending on the terms of the loan agreement, Morgan Stanley and Goldman Sachs could be entitled not just to get Tesla stock, but also collect any deficiency balance in order to get repaid on the loan. They would probably sue Musk in court for repayment, and have his remaining assets seized if they were able to win the lawsuit.


Also, if Tesla was bought out by another company via a share exchange agreement, existing shareholders wouldn't be wiped out. They would get shares in the company that bought Tesla.


Also, you are misusing my definition of "golden parachute" which does NOT imply insider trading, which is why your previous refutation was wrong and didn't actually refute what I was saying.

"Golden parachute" refers to an exit compensation plan where a company goes tits up, but the top leadership still reaps significant financial reward. It is a metaphor that they do not go down with the burning wreckage of an airplane and the chute is literally made of money.

I am happy that you can link the Enron people, but I am already aware of all of those convictions and I am also aware that they were overtly fraudulent in their business conduct.

I have not said Musk is. I simply think Musk is selling a lot of hype and hot air (neither of which are illegal) and is handsomely profiting from it.

So let me give you some examples of actual "golden parachutes" that didn't involve criminal conduct.

Continental Airlines (1980ish) - Frank Lorenzo came in and slashed costs by running the company through bankruptcy. He voided union contracts (resulting in Congressional change to union laws that prohibit anyone other than a federal court from voiding them) and sent creditors home with pennies on the dollar. In the process, he ended up with a large % of the company and reaped the rewards financially when the company recovered.

He then purchased Eastern Airlines in 1986 and instituted a program of crushing the unions into submission. When that failed because of the bankruptcy laws he had caused to change, he started transferring assets to his non-union company (Continental) and leasing them back to Eastern at a loss for Eastern and a gain for Continental. When the unions exhausted the RLA process and were released to strike, he staffed the company with scabs and continued to take assets while the airline flew. He transferred planes, computer technology, routes, hubs, and whole regional airlines into Continental. When Eastern finally had no choice but to file bankruptcy, he walked away with his Continental holdings intact and billions in new assets that used to belong to Eastern Airlines. The employees and shareholders of Eastern got the shaft.

Then, in 1994 after his henchmen had run Continental into the ground and they went bankrupt again (as part of a forced management change), he remained a major shareholder, kept his flight benefits for life and still ended up millions richer.

When United and AA filed bankruptcy (as well as Delta), the CEO's ALL walked away with packages worth millions and millions of dollars while the shareholders, taxpayers and employees all footed the bills.

Same thing with the market crash in 2008. Many of the executives that had directly caused it kept their millions because they had broken no laws in doing so.

Wells Fargo and their account scamming scandal is another prime example. Stumpf and most of the other executives retired and kept their money.

The list literally goes on and on and on. It is why NickGravesX talks about the "banksters" all the time.

So sorry, but you are misapplying my statement to mean "illegal" when it just means "immoral, but legal."

My credibility is still perfectly intact. But thanks anyway.




You are still confusing corporate raiding with executive compensation contract clauses.

Your credibility today: still zip.




You have completely lost the plot now.

I specifically highlighted several avenues that would allow an executive to walk away from a dumpster fire with millions in tow and not having broken a single law in the process.

It happens every day. The fact that you are now trying to drag that off topic isn't going to happen.

Executive compensation or corporate raiding doesn't matter. What matters is exploiting limitations or loopholes in the law to retain money.

The only questionable credibility here at this point is yours. You are so desperately stretching everything I say that it is actually laughable at this point.

I never said shareholders were wiped out in a merger. In fact, quite the opposite. I mentioned pretty plainly that if a merger occurred with a stock swap people would receive value in the new company when I made this statement right here:

If they are bought out and there is a share swap, then he just ends up with the same amount of value in the new company, and likely a large % of the vote as a result.


It pretty well goes without saying that would apply to ALL shareholders. I guess I should have specified so you understood better...

Not all avenues I highlighted involved Tesla stock becoming worthless, so you might want to go back and re-read what I wrote. I was highlighting options available to Musk going forward.

Good day.

* To prove my point, I will address only one part of your post. I didn't even read the rest because it is a complete waste of time.

I NEVER made any claim that a loan didn't have to be repaid, and you know that I made no such claim. It is patently absurd that you would even try to pretend I made any such claim.

You probably know as well as I do, that a loan is typically secured with collateral. Collateral is what the bank takes if you default on your loan. In this case, Musk has borrowed against his Tesla stock, which means the stock is collateral. If the Tesla stock drops and Musk can no longer meet his obligations, then the bank goes after the stock because that is what was put up for collateral. He walks away with the loan, the bank walks away with whatever was used to secure the loan. If the bank takes a bath for loaning on stock that ended up worthless, that is their problem, just like all of the other common share holders who bought the stock speculating that it would make them money.

Secondly, MUsk's shares appear to be held by a separate trust (see the SEC filings I have already provided you). That further complicates it because his liability is likely limited to or by the trust. That is one of the main reasons for having a trust. Trusts have specific things that happen or don't happen legally. Many business owners and executives put their holdings in a trust specifically because it limits liability and access either inside or outside the trust. This occurs specifically because legal trusts are considered separate from other entities.

https://www.investopedia.com/terms/t/trust-fund.asp

https://www.fidelity.com/growing-managing-wealth/estate-planning/trusts

Irrevocable trust: An irrevocable trust typically transfers your assets out of your (the grantor's) estate and potentially out of the reach of estate taxes and probate, but cannot be altered by the grantor after it has been executed. Therefore, once you establish the trust, you will lose control over the assets and you cannot change any terms or decide to dissolve the trust.
An irrevocable trust is generally preferred over a revocable trust if your primary aim is to reduce the amount subject to estate taxes by effectively removing the trust assets from your estate. Also, since the assets have been transferred to the trust, you are relieved of the tax liability on the income generated by the trust assets (although distributions will typically have income tax consequences). It may also be protected in the event of a legal judgment against you.


Trusts, LLC's, Corporations, Partnerships, Holding companies, foundations, etc are ALL ways to limit liability and in some cases indemnity. They all have limitations, and I have never claimed that any of them will provide 100% protection, but they are there to be used for such purposes. If an individual files bankruptcy, it would most likely NOT affect the trust they have setup, if it was setup for the purpose of sheltering assets.

The rich get richer for 2 simple reasons:

1) They make the money work for them.

2) They protect the money from as many sources of tax and liability as they can.



owequitit
Profile for owequitit
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-14-2018 03:15
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http://www.businessinsider.com/elon-musk-doesnt-care-about-you-2018-5?utm_source=yahoo&utm_medium=referral

Interesting OpEd.

Elon Musk doesn't care about you.
If he did, he would have details about the things that matter to customers and shareholders — the progress of the Model 3, his company's profitability, and continued efforts to make his cars as safe as possible.
Sorry.

I'm about to tell you something that might break your heart. Elon Musk doesn't care about you.

By you I mean his customers, Wall Street, his shareholders, his creditors, his employees, and anyone who just might be interested in learning more about electric cars.

This lack of interest in anything you was on florid display during Tesla's first-quarter earnings call Wednesday evening. Musk had virtually no details on his cash-poor company's progress solving the problems that will define its future. He had no details about when Tesla would meet production goals for the Model 3, how he was going fix production issues, or how he planned to swing the company into profitability.

This is because none of that interests him. That has to do with you, and what interests Musk has to do with him.


Musk is more interested in the appearance of action at Tesla than action itself. That's because, so far, the appearance of action has gotten him as much praise and adulation from the faithful as inaction. Musk is the anti-Cicero. For him seeming is as good as being.

"Every metric that we've looked at internally suggests we are the best in class," he said on the call, failing to discuss what those metrics are or any metric, really.

Seeming, so far, has done enough to give Musk what he really craves — enough money to run his businesses with contempt for anyone who might question him, and, more important, the role of venerated leader of the cult of Musk. Everything else is just bothersome detail.

Now the cult of Musk has some good attributes. People love how Teslas drive, and Space X has captured the imagination of the entire country. In what are unquestionably confusing times, the cult of Musk is getting Americans excited about the future. For even the most cynical people, the positivity of endless possibility through science is infectious.

That's where my list of positives ends.

How you do anything is how you do everything
Now back to those bothersome details, because that's where you come into play.


My colleague Matt Debord wrote that Musk's contempt on the call was clearly, singularly for Wall Street. Debord's assessment doesn't go far enough for my taste, obviously, and far be it for me to defend the cabal of geniuses who gave the world such hits as the 2008 financial crisis and the tech bubble.

But it's completely normal for numbers guys to ask questions about numbers. When they get yelled about it for asking "boring, bonehead" questions about a business their clients are investing in, that's a red flag. Questions about the strategic "moat" protecting the business, in this case Tesla's exclusive supercharger network, should not be met with comments like the following:

"First of all, I think moats are lame," Musk said. "They're, like, nice, in a sort of quaint, vestigial way. But if your only defense against invading armies is a moat, you will not last long. What matters is the pace of innovation. That is the fundamental determinant of competitiveness."

This is not a game of Dungeons and Dragons with your friends. This is a business, and your investors (shareholders and creditors) would like you to protect it. At some point during the call, with all the enthusiasm of a Chinese politician reading out their guilty plea on state TV, Musk monotoned something about how he realizes Tesla "isn't a real company until" it's profitable.

Even Adam Jonas, one of Wall Street's most faithful Tesla fans, got the side of Musk's tongue for suggesting Musk raise money while he could. This in the midst of reports that the company is burning cash at a mind-bending rate.

So, no, Musk does not care about Wall Street bankers, and frankly that's fine. But he also doesn't care about his creditors and shareholders either. That is not OK.

Where are the customers' yachts (Teslas)?
And then there are the customers. On the call, Musk said he was focusing on Model 3 production, and as such is not focused on the Tesla Semi. We "haven't really tried to sell the Semi," he said.

Oh, so you've accepted about 2,000 reservations, and who knows how many thousands of dollars, for a vehicle you haven't really started working on manufacturing yet?

Reports that Tesla is underpaying workers and undercounts their injuries have barely gotten attention. Perhaps that's more of a reflection on us than it is on Tesla. Either way, add employees to the list of things Musk would rather not bother getting into detail about.

You know what else Musk does care about? The media and the short sellers. These are two entities that can't attack or change what Tesla is, only its perception. Nevertheless, these are two entities that bother him. Musk called short-seller attacks "hurtful" in Rolling Stone, and on the call he seethed about reporters who dared write about Autopilot crashes.

I bring this up here because it should be clear to anyone with the desire to experiment with any new technology that there should be as much information in the public domain about it as possible. In this case we're talking about the potential for a deadly car crash.

Musk disingenuously compared coverage of traditional car crashes (the causes of which have been known for decades) with an Autopilot crash, the causes for which are still being understood.

The comparison itself is an insult to anyone who might consider driving a Tesla at all, let alone on Autopilot. Which brings me back to my point: Musk doesn't care about customers.

Toward the end of the call someone asked if Musk could just please (please) send a tweet out or something when Model 3 production ramps up to 3,000 cars a week. The investor said he was concerned about the volatility of Tesla's share price.

Musk responded to this by telling the investor that if he didn't have the stomach for volatility, he shouldn't own Tesla's stock.

He has more important things to tweet, anyway.

NealX
Profile for NealX
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-14-2018 08:41
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There will only be room for Tesla owners on the trip to Mars.



atomiclightbulb
Profile for atomiclightbulb
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-14-2018 18:00
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owequitit wrote:
atomiclightbulb wrote:
owequitit wrote:
atomiclightbulb wrote:
owequitit wrote:
First of all, you need to recognize hyperbole.


Yeah, sure. And how much slack have you given TonyE when he perhaps exaggerates the feel and performance of his cars?

You claiming this, seems to me very hypocritical.



Second, they DID work in my initial calculations because the same developmental crashes were included in all of the programs. The line was drawn with some of ULA's rockets, because despite sharing a name, they were fundamentally all new designs. You simply didn't like the metric.

But it doesn't matter now because the metric has still been adjusted to accommodate your position and they are STILL roughly 8 times more likely to splash one than ULA.


You are entitled to evaluate SpaceX's safety probabilities as poor or even unacceptable, but I will point out that the marketplace is willing to accept that level of risk.

SpaceX's launch manifest shows no lack of customers: See http://www.spacex.com/missions, section labeled "future missions".

NASA, Inmarsat, Iridium, USAF, and Sirius XM are among SpaceX's past and future customers. Bangladesh and Arabsat (Saudi Arabia + 20 other Arab nations) are also customers.



I didn't use the term "poor" or "unacceptable," so not sure where you got that from. I may have used that a couple of years ago when their launch record % was far worse, but that doesn't apply to this thread today.

You are trying to imply a lot of meaning that isn't there.



Definitely NOT a "couple years ago".

Less than 1 year ago: http://vtec.net/forums/one-message?message_id=1322717&page_number=3& @ 07-10-2017 23:47

You wrote:

owequitit wrote:
SpaceX's safety record leaves a lot to be desired. But, I am going to go out on a limb and guess that you don't condone airlines killing people, companies spilling chemicals and oil spills in the interest of cost savings, so I am curious why you are so quick to pull the "SpaceX is cheaper" card when it involves Musk?

If a safety record sucks and leads to catastrophic problems, then it sucks and leads to catastrophic problems. I don't make exceptions for my personal heroes.

As I have asserted here before, SpaceX's success record leaves a lot to be desired.


"leaves a lot to be desired"
"sucks"

Which is basically another way of saying 'poor' or 'unacceptable'.

You've been fairly open about your complete contempt for SpaceX's safety record. Pretending otherwise is dishonest.




1) You are incorrectly attempting to apply meaning to words that I did not use. When I said "a lot to be desired," it was an accurate statement. At the time I said that, SpaceX's failure rate was 1:19, while ULA's was 0:70 just for Atlas V. Assuming they had lost the very next launch, and had a failure rate of 1:71, SpaceX STILL would have had roughly a loss rate that was 4x higher than just the Atlas V program. However, ULA did not. They have subsequently launched 7 more Atlas V rockets with zero failures.


(1) "leaves a lot to be desired" and "sucks" are both subjective statements. And they both are commonly understood to mean "unacceptable".

You can tie yourself into a pretzel trying to say that you meant something else, but everyone can see what is really going on.

atomiclightbulb
Profile for atomiclightbulb
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-14-2018 18:26
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owequitit wrote:
I specifically highlighted several avenues that would allow an executive to walk away from a dumpster fire with millions in tow and not having broken a single law in the process.

It happens every day. The fact that you are now trying to drag that off topic isn't going to happen.

Executive compensation or corporate raiding doesn't matter. What matters is exploiting limitations or loopholes in the law to retain money.


It absolutely does matter.

You obviously still don't understand that this involves the difference between an executive with an employment contract, and an outside party who buys up shares to exert control over a corporation.

You kept stating that Musk must have some sort of "golden parachute", and then cited instances of corporate raiding in support. This makes no sense, because Musk isn't an outside party trying to initiate a hostile takeover in order to skim money out of a business entity.

If you wanted to make the broader point you just made, there was no reason whatsoever to throw in all the irrelevant stuff about corporate raiding.

You never actually established that Musk has a golden parachute, and you admitted this (while clinging to the possibility that he has some escape clause somewhere in the paperwork).



I never said shareholders were wiped out in a merger. In fact, quite the opposite. I mentioned pretty plainly that if a merger occurred with a stock swap people would receive value in the new company when I made this statement right here:

If they are bought out and there is a share swap, then he just ends up with the same amount of value in the new company, and likely a large % of the vote as a result.


It pretty well goes without saying that would apply to ALL shareholders. I guess I should have specified so you understood better...


That is a fair clarification.


I NEVER made any claim that a loan didn't have to be repaid, and you know that I made no such claim. It is patently absurd that you would even try to pretend I made any such claim.

You probably know as well as I do, that a loan is typically secured with collateral. Collateral is what the bank takes if you default on your loan. In this case, Musk has borrowed against his Tesla stock, which means the stock is collateral. If the Tesla stock drops and Musk can no longer meet his obligations, then the bank goes after the stock because that is what was put up for collateral. He walks away with the loan, the bank walks away with whatever was used to secure the loan. If the bank takes a bath for loaning on stock that ended up worthless, that is their problem, just like all of the other common share holders who bought the stock speculating that it would make them money.

Secondly, MUsk's shares appear to be held by a separate trust (see the SEC filings I have already provided you). That further complicates it because his liability is likely limited to or by the trust. That is one of the main reasons for having a trust. Trusts have specific things that happen or don't happen legally. Many business owners and executives put their holdings in a trust specifically because it limits liability and access either inside or outside the trust. This occurs specifically because legal trusts are considered separate from other entities.



(1) You stated: "if the stock goes belly up, he may be able to just walk away with his billions in loans", but made no mention of the fact that in financial terms, this is essentially walking away with less than nothing.


(2) Look up the term "deficiency balance". Creditors can and will go after a debtor if (a) the collateral is insufficient to cover the money still owed, and (b) the terms of such a loan allow for collection of a deficiency. Now, Morgan Stanley and Goldman Sachs could possibly have been dumb enough to not have a deficiency balance clause in their loan agreement with Musk, but we have no way of knowing for sure.


(3) You state that Musk's shares are protected by a "Trust", but you never bothered to look up what kind of trust he actually has. It's public knowledge: http://www.businessinsider.com/elon-musk-borrows-150-million-to-buy-tesla-2013-5?r=US&IR=T&IR=T

The loan in this case was to both Elon Musk personally and the "Elon Musk Revocable Trust dated July 22, 2003".

Your own link states that the irrevocable trust offers more protection in terms of being (a) a tax shield and (b) possibly being protected against lawsuits.

So again, you tend to write ridiculous amounts of stuff and throw around all kinds of terms, but when I actually take a deeper look at what you are saying, most of the time it is obvious that you don't actually understand the topic.

owequitit
Profile for owequitit
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-15-2018 00:50
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atomiclightbulb wrote:
owequitit wrote:
atomiclightbulb wrote:
owequitit wrote:
atomiclightbulb wrote:
owequitit wrote:
First of all, you need to recognize hyperbole.


Yeah, sure. And how much slack have you given TonyE when he perhaps exaggerates the feel and performance of his cars?

You claiming this, seems to me very hypocritical.



Second, they DID work in my initial calculations because the same developmental crashes were included in all of the programs. The line was drawn with some of ULA's rockets, because despite sharing a name, they were fundamentally all new designs. You simply didn't like the metric.

But it doesn't matter now because the metric has still been adjusted to accommodate your position and they are STILL roughly 8 times more likely to splash one than ULA.


You are entitled to evaluate SpaceX's safety probabilities as poor or even unacceptable, but I will point out that the marketplace is willing to accept that level of risk.

SpaceX's launch manifest shows no lack of customers: See http://www.spacex.com/missions, section labeled "future missions".

NASA, Inmarsat, Iridium, USAF, and Sirius XM are among SpaceX's past and future customers. Bangladesh and Arabsat (Saudi Arabia + 20 other Arab nations) are also customers.



I didn't use the term "poor" or "unacceptable," so not sure where you got that from. I may have used that a couple of years ago when their launch record % was far worse, but that doesn't apply to this thread today.

You are trying to imply a lot of meaning that isn't there.



Definitely NOT a "couple years ago".

Less than 1 year ago: http://vtec.net/forums/one-message?message_id=1322717&page_number=3& @ 07-10-2017 23:47

You wrote:

owequitit wrote:
SpaceX's safety record leaves a lot to be desired. But, I am going to go out on a limb and guess that you don't condone airlines killing people, companies spilling chemicals and oil spills in the interest of cost savings, so I am curious why you are so quick to pull the "SpaceX is cheaper" card when it involves Musk?

If a safety record sucks and leads to catastrophic problems, then it sucks and leads to catastrophic problems. I don't make exceptions for my personal heroes.

As I have asserted here before, SpaceX's success record leaves a lot to be desired.


"leaves a lot to be desired"
"sucks"

Which is basically another way of saying 'poor' or 'unacceptable'.

You've been fairly open about your complete contempt for SpaceX's safety record. Pretending otherwise is dishonest.




1) You are incorrectly attempting to apply meaning to words that I did not use. When I said "a lot to be desired," it was an accurate statement. At the time I said that, SpaceX's failure rate was 1:19, while ULA's was 0:70 just for Atlas V. Assuming they had lost the very next launch, and had a failure rate of 1:71, SpaceX STILL would have had roughly a loss rate that was 4x higher than just the Atlas V program. However, ULA did not. They have subsequently launched 7 more Atlas V rockets with zero failures.


(1) "leaves a lot to be desired" and "sucks" are both subjective statements. And they both are commonly understood to mean "unacceptable".

You can tie yourself into a pretzel trying to say that you meant something else, but everyone can see what is really going on.



My last response stands.


owequitit
Profile for owequitit
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-15-2018 01:30
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https://www.marketwatch.com/story/tesla-model-s-crashes-in-utah-and-more-executives-depart-2018-05-14?link=MW_popular

Tesla Inc. was in the headlines again Monday with a series of announcements and news stories that include a restructuring to flatten the company’s management structure.

Chief Executive Elon Musk unveiled that news in a memo to employees, that lacked specific names or details. Musk made the announcement after the Wall Street Journal reported that Matthew Schwall, the company’s main technical contact with U.S. safety investigators, has left the company for self-driving-car maker Waymo LLC, a unit of Google parent Alphabet Inc. On Friday, Tesla said that its engineering chief, Doug Field, was taking a leave of absence to recharge and spend time with family.

“To ensure that Tesla is well prepared for the future, we have been undertaking a thorough reorganization of our company,” Musk said in the memo, according to the Wall Street Journal. “As part of the reorg, we are flattening the management structure to improve communication, combining functions where sensible and trimming activities that are not vital to the success of our mission.”

On Friday, a Model S crashed into a truck in South Jordan, Utah, after failing to slow for a red light, Reuters reported, citing local police.

The Tesla car was traveling at 60 miles an hour when it hit a truck from the city’s Unified Fire Authority at 6:38 p.m. Mountain time, said the police. It was not clear if the driver was using the electric car maker’s autopilot system at the time of impact, said Reuters. Tesla did not immediately respond to requests for comment, it said.

Just last week, the National Transportation Safety Board said it would begin examining the fiery crash of a Tesla Model S car that killed two teenagers in Fort Lauderdale, Fla., marking the fourth active federal probe involving the company’s vehicles, the Wall Street Journal reported.

The NTSB is investigating three other traffic incidents involving Tesla vehicles, including a fatal crash on March 23 that fueled questions about the safety of the autopilot feature, said the paper.

In yet another report on Monday, the Journal said developers of the Tesla autopilot system had expressed concern that it did not have enough safeguards to ensure drivers would remain attentive and keep their hands on the steering wheel. But executives overruled adding more sensors because of costs and worry that the technology would annoy drivers by beeping too much.

“Everyone at Tesla is not only encouraged, but expected, to provide criticism and feedback to ensure that we’re creating the best, safest cars on the road,” a Tesla spokesman said in a statement. “This is especially true on the Autopilot team, where we make decisions based on what will improve safety and provide the best customer experience, not for any other reason.”

Tesla is still struggling to meet its own production targets for the Model 3, the mass-market sedan launched last year. On a conference call with analysts following first-quarter results earlier this month, Tesla kept intact the target of producing 5,000 Model 3 sedans a week by the end of the second quarter.

Tesla has moved the goal posts for Model 3 production at least twice. A previous target called for 2,500 Model 3 sedans a week by the end of first quarter; Tesla missed that one, reporting in early April a production rate of around 2,000 a week.

During the call and in a letter to investors sharing results, however, Tesla disclosed that it paused Model 3 production in the third week of April to ”enable higher levels of output,” but in the week before the shutdown it produced a record 2,270 Model 3 sedans, its third straight week in April with more than 2,000 of the cars produced.

The call was more notable for Chief Executive Elon Musk’s refusal to answer questions on the company’s finances, resulting in a stream of analyst notes describing it as “feisty,” “odd,” “very, very bad” and “truly bizarre,” sending its stock down 7% in a single session.


It will be interesting to see what the NTSB turns up as a result of their investigations.

atomiclightbulb
Profile for atomiclightbulb
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-15-2018 17:43
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atomiclightbulb wrote:
owequitit wrote:I NEVER made any claim that a loan didn't have to be repaid, and you know that I made no such claim. It is patently absurd that you would even try to pretend I made any such claim.

You probably know as well as I do, that a loan is typically secured with collateral. Collateral is what the bank takes if you default on your loan. In this case, Musk has borrowed against his Tesla stock, which means the stock is collateral. If the Tesla stock drops and Musk can no longer meet his obligations, then the bank goes after the stock because that is what was put up for collateral. He walks away with the loan, the bank walks away with whatever was used to secure the loan. If the bank takes a bath for loaning on stock that ended up worthless, that is their problem, just like all of the other common share holders who bought the stock speculating that it would make them money.

Secondly, MUsk's shares appear to be held by a separate trust (see the SEC filings I have already provided you). That further complicates it because his liability is likely limited to or by the trust. That is one of the main reasons for having a trust. Trusts have specific things that happen or don't happen legally. Many business owners and executives put their holdings in a trust specifically because it limits liability and access either inside or outside the trust. This occurs specifically because legal trusts are considered separate from other entities.



(1) You stated: "if the stock goes belly up, he may be able to just walk away with his billions in loans", but made no mention of the fact that in financial terms, this is essentially walking away with less than nothing.


(2) Look up the term "deficiency balance". Creditors can and will go after a debtor if (a) the collateral is insufficient to cover the money still owed, and (b) the terms of such a loan allow for collection of a deficiency. Now, Morgan Stanley and Goldman Sachs could possibly have been dumb enough to not have a deficiency balance clause in their loan agreement with Musk, but we have no way of knowing for sure.


(3) You state that Musk's shares are protected by a "Trust", but you never bothered to look up what kind of trust he actually has. It's public knowledge: http://www.businessinsider.com/elon-musk-borrows-150-million-to-buy-tesla-2013-5?r=US&IR=T&IR=T

The loan in this case was to both Elon Musk personally and the "Elon Musk Revocable Trust dated July 22, 2003".

Your own link states that the irrevocable trust offers more protection in terms of being (a) a tax shield and (b) possibly being protected against lawsuits.

So again, you tend to write ridiculous amounts of stuff and throw around all kinds of terms, but when I actually take a deeper look at what you are saying, most of the time it is obvious that you don't actually understand the topic.



Two other points:

(1) Musk used a substantial amount of the money he borrowed to buy more Tesla stock. If Tesla went under, a lot of what he borrowed would be zero'd out.

For example:

http://www.businessinsider.com/elon-musk-borrows-150-million-to-buy-tesla-2013-5?r=US&IR=T&IR=T


(2) If Musk were to default on his loans and try to escape, his credit score would essentially go to zero. This would likely foreclose the possibility of future loans from ANY financial institution. As Musk's daily expenditures are funded by loans, he would quickly lose the billionaire's life.

owequitit
Profile for owequitit
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-18-2018 01:54
Reply to This Message Attach Quote to Reply
atomiclightbulb wrote:
atomiclightbulb wrote:
owequitit wrote:I NEVER made any claim that a loan didn't have to be repaid, and you know that I made no such claim. It is patently absurd that you would even try to pretend I made any such claim.

You probably know as well as I do, that a loan is typically secured with collateral. Collateral is what the bank takes if you default on your loan. In this case, Musk has borrowed against his Tesla stock, which means the stock is collateral. If the Tesla stock drops and Musk can no longer meet his obligations, then the bank goes after the stock because that is what was put up for collateral. He walks away with the loan, the bank walks away with whatever was used to secure the loan. If the bank takes a bath for loaning on stock that ended up worthless, that is their problem, just like all of the other common share holders who bought the stock speculating that it would make them money.

Secondly, MUsk's shares appear to be held by a separate trust (see the SEC filings I have already provided you). That further complicates it because his liability is likely limited to or by the trust. That is one of the main reasons for having a trust. Trusts have specific things that happen or don't happen legally. Many business owners and executives put their holdings in a trust specifically because it limits liability and access either inside or outside the trust. This occurs specifically because legal trusts are considered separate from other entities.



(1) You stated: "if the stock goes belly up, he may be able to just walk away with his billions in loans", but made no mention of the fact that in financial terms, this is essentially walking away with less than nothing.


(2) Look up the term "deficiency balance". Creditors can and will go after a debtor if (a) the collateral is insufficient to cover the money still owed, and (b) the terms of such a loan allow for collection of a deficiency. Now, Morgan Stanley and Goldman Sachs could possibly have been dumb enough to not have a deficiency balance clause in their loan agreement with Musk, but we have no way of knowing for sure.


(3) You state that Musk's shares are protected by a "Trust", but you never bothered to look up what kind of trust he actually has. It's public knowledge: http://www.businessinsider.com/elon-musk-borrows-150-million-to-buy-tesla-2013-5?r=US&IR=T&IR=T

The loan in this case was to both Elon Musk personally and the "Elon Musk Revocable Trust dated July 22, 2003".

Your own link states that the irrevocable trust offers more protection in terms of being (a) a tax shield and (b) possibly being protected against lawsuits.

So again, you tend to write ridiculous amounts of stuff and throw around all kinds of terms, but when I actually take a deeper look at what you are saying, most of the time it is obvious that you don't actually understand the topic.



Two other points:

(1) Musk used a substantial amount of the money he borrowed to buy more Tesla stock. If Tesla went under, a lot of what he borrowed would be zero'd out.

For example:

http://www.businessinsider.com/elon-musk-borrows-150-million-to-buy-tesla-2013-5?r=US&IR=T&IR=T


(2) If Musk were to default on his loans and try to escape, his credit score would essentially go to zero. This would likely foreclose the possibility of future loans from ANY financial institution. As Musk's daily expenditures are funded by loans, he would quickly lose the billionaire's life.



It's already been clarified, discussed, linked and elaborated on. Multiple times.

I NEVER said he would keep ALL of his money. I said he would keep a lot of it. In fact, I have already specifically said that AT LEAST once, but you can't seem to understand what I am actually saying, which is why this is done.

owequitit
Profile for owequitit
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-18-2018 02:04
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http://fortune.com/2018/05/16/tesla-crash-utah-investigation-nhtsa/

The National Highway Traffic and Safety Administration confirmed Wednesday that it has sent a team of special crash investigators to look into a Tesla Model S that plowed into a fire department vehicle in Utah while its semi-autonomous driving system Autopilot was engaged.

This is the latest investigation by federal regulators into recent accidents involving Tesla vehicles.

The 28-year-old female driver, who hit a fire truck from behind at about 60 miles per hour, was cited by police after admitting she was looking at her phone prior to the collision, according to South Jordan Police. The crash resulted in minor injuries to both drivers, the police said in a statement.

“Consistent with NHTSA’s oversight and authority over the safety of all motor vehicles and equipment, the agency has launched its special crash investigations team to gather information on the South Jordan, Utah, crash. NHTSA will take appropriate action based on its review,” NHTSA wrote in an emailed statement to Fortune.


NHTSA’s special crash team is different from the agency’s Office of Defect Investigation. The SCI team collects a range of data from basic information found in routine police and insurance crash reports to comprehensive data from special reports by professional crash investigation teams. The SCI collects relevant data on vehicle, occupants, injury mechanisms, roadway, and safety systems from 100 crashes designated for study annually, according to NHTSA.

The National Transportation Safety Board said it is not investigating the Utah crash.

“When using Autopilot, drivers are continuously reminded of their responsibility to keep their hands on the wheel and maintain control of the vehicle at all times,” a Tesla spokeswoman said in an emailed statement. Tesla has always been clear that Autopilot doesn’t make the car impervious to all accidents.”


Looks like the NTSB passed the investigation onto NHTSA.

owequitit
Profile for owequitit
Re: Now it's getting worse WSJ: Tesla is in trouble    (Score: 1, Normal) 05-18-2018 02:08
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https://www.thestreet.com/investing/stocks/elon-musk-tesla-empire-falling-apart-14588005

The situation at Tesla is getting more disturbing.

You know there is mild internal chaos inside a struggling company when (1) a spokesman responds to your email about a story on Saturday night within 30 minutes of the email but doesn't address your lone question and poses questions of his own about your rather straightforward story; (2) you promptly reply with a follow-up to confirm the basis of your original question but don't receive any response. Welcome to my Saturday night with Tesla (TSLA - Get Report) .

The exchange came regarding news that Matthew Schwall, who had been the director of field performance engineering at Tesla, left the company to join rival Waymo, according to The Wall Street Journal. Schwall still hasn't changed his LinkedIn profile, and I still haven't received an email back from Tesla. Not too sure where the mental disconnect is here, it's either (A) Schwall didn't leave Tesla and continues to help make electric cars; (B) Schwall did leave Tesla to work at a rival. It's simple stuff, really.

Nevertheless, Schwall's departure comes hot on the heels of Tesla's senior vice president of engineering, Doug Field, deciding to step away from the company to spend more time with his family. To this departure, the Tesla spokesman said: "Doug is just taking some time off to recharge and spend time with his family. He has not left Tesla." Hey, working for Elon Musk is grueling. With Tesla trying to ramp production of its Model 3 in the hopes of reaching profitability later this year, the exits of top engineers should be a concern for investors. That investor base also includes the big-thinking Musk, who recently invested a fresh $10 million in the company via stock purchases.

Keep in mind, Tesla only has three executives on its management team. The last thing Tesla needs is a talent exodus. In the last 16 months, Tesla has lost at least 23 top executives per data from Tesla short-seller Mark Spiegel.


 
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