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Comment by flafla2 | Hacker News Reader

I understood this comment as Elon reaffirming to his shareholders that he was not trying to defraud them, and that there actually was adequate funding to take Tesla private. This could also be part of a preemptive legal defense against the SEC in case Elon is formally investigated / questioned. However I feel that the SEC would be more interested in the specific wording of the "funding secured" tweet, which was blatantly false in light of Tesla's previous post [1] (For those who aren't following along: Elon basically only had a verbal offer to take Tesla private from Saudi investors, not anything in writing).

It's also worth mentioning that the idea of breaking long-term financial news for a Fortune 500 company via Twitter of all places is highly unorthodox and suspect in its own right, so I doubt this comment would have much effect in practice.

[1] https://www.tesla.com/blog/update-taking-Tesla-private

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> It's also worth mentioning that the idea of breaking long-term financial news for a Fortune 500 company via Twitter of all places is highly unorthodox and suspect in its own right

The SEC has indicated that Twitter is an approapriate venue for making public statements, as long as the company has indicated that investors should look to Twitter for updates. Tesla did indicate this previously, according to news reports I recall from last week.

I trust Twitter more than just about anyone to ensure no one is getting the jump on seeing the information before anyone else.

And I’ll also mention, Elon has blocked a few user accounts on Twitter. I don’t see a problem with this as anyone can watch Elon’s tweets in incognito mode. The law requires the notice is public, not universal. I can’t think of anything more public than a tweet.

I think the best evidence that Elon was not trying to defraud investors, besides the fact that he did not trade on the news and gained nothing from it, is that it was a contemporaneous tweet he made on his way to the airport.

> It's also worth mentioning that the idea of breaking long-term financial news for a Fortune 500 company via Twitter of all places is highly unorthodox and suspect in its own right, so I doubt this comment would have much effect in practice.

Elon can't have this both ways, though. Tesla has disclosed that it will use social media for financially material announcements, and Elon has embraced this. It can't be legitimate most of the time and illegitimate when it makes for a convenient defense.

Personally, I don't think Elon's intention was to defraud -- I think he was impulsive and careless, and I expect the SEC will reach the same conclusion. But I think if he's going to use Twitter to talk about such things, his tweets need to carry the same weight as an equivalent SEC filing.

> But I think if he's going to use Twitter to talk about such things, his tweets need to carry the same weight as an equivalent SEC filing.

A tweet is not an SEC filing and it can never be one. It’s 140 characters typed on your phone. It is not reviewed by corporate counsel. It is not reviewed at all.

I’m going to step out on a limb and say this is an important mode of communication. I like having this window into Musk’s operations.

But a tweet is just a tweet. It’s never the whole story. Here we are dissecting two single words, and some people are saying jail a man.

I say no two words on Twitter can jail a man. Fine him a million dollars a word if you have to.

> I say no two words on Twitter can jail a man. Fine him a million dollars a word if you have to.

By convention, with two words you're 1/3 of the way to a hanging.

> A tweet is not an SEC filing and it can never be one. It’s 140 characters typed on your phone. It is not reviewed by corporate counsel. It is not reviewed at all.

Right, but this is exactly the downside of disclosing things via Twitter. If Elon uses tweets and SEC filings interchangeably (that is what he's doing here -- this would ordinarily be disclosed in an 8-K), the rules are going to apply to both. It's not that I'm unsympathetic to his intentions, but the SEC can't carve out exceptions for impulsive behavior just because it happened on social media -- traders are acting on this information in real time and need to be able to trust it.

(I agree the calls for imprisonment are beyond insane; I focus on the Twitter vs 8-K part of the story because I find it more interesting, and I'd like to see more CEOs speak directly to followers as Elon does but with a bit less impulsivity).

> I say no two words on Twitter can jail a man.

What about "I confess"? :)

Nevertheless, I think the spirit of your argument is mostly valid. Musk is doing the equivalent of Roosevelt's fireside chats. Granted, he should be smarter than to tweet willy-nilly, but I suppose we can say the same for just about everybody on Twitter nowadays...

I also don't think pumping up stock price to avoid a convertible bond conversion is fraud. And of course OJ is innocent too.

This is clearly not what happened, and never was planned to happen.

The bonds don’t convert for another year.

You don’t send a tweet about something that will immediately have a thousand people banging down your door for answers and expect it to move the stock price a year later.

There was zero personal financial incentive for Musk to deceive with the tweet.

As it happens, the criminal statute requires that a purchase or sale of securities takes place, so I can’t see how it applies.

No, he wasn't trying to defraud his shareholders. Quite the opposite - defraud his skeptics aka short sellers.

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