Tuesday, February 26, 2019 ... Deutsch/Español/Related posts from blogosphere

Will the SEC allow Musk to urinate on their faces again?

Elon Musk is probably the single best example of a crook energized by millions of brain-dead fans who is basically allowed to stand above the law by the decaying American justice system simply because he's producing lies – his business is the production of lies on a 24/7 basis – which are mixtures of pseudoscientific superstitions, impossible promises, attacks against all his real and fabricated enemies, and political correctness – the latter is primarily about the global warming delusions that are still a fundamental part of this whole cult.

In August 2018, he notoriously tweeted that the funding was secured for taking the company private at $420 per stock. It was immediately clear to the intelligent observers that it had been a complete lie and within days, it was indeed officially admitted that it was a complete lie.

Nevertheless, the lie has temporarily added over 10% to the stock price – which went close to the insane $380 for a while. (The fair price of the stock surely is below $20 if we are very generous.) Because of this securities fraud, lots of the people bought the stock at levels that were 10% overpriced, some shortsellers were driven to margin calls and lost money – while others were allowed to sell at 10% higher price and new shortsellers could have entered from a better position. These temporary price fluctuations are obviously a zero-sum game so Musk's lie has its losers and winners. But this whole "game" is rigged and there are very good reasons why the laws of civilized countries classify such lies from a CEO of a publicly trading company as a crime.

A CEO of a public company is a person who is sometimes or generally "selling the stocks of the company he controls" (and who is clearly motivated to make the stock price higher) and if someone is telling you that what you buy from him is something else than what you are actually buying, it's simply fraud. In the case of stocks, it's called the securities fraud. But the essence is the same as if someone sells you bottles of water for the price of the most expensive whiskey, pretending that whiskey is inside. How could we not have laws that make it illegal?

The SEC, America's regulator of the stock market, reacted by harsh and principled words. It wouldn't allow a crook to deceive in this way, whether or not he or she is considered to be on par with Kim Kardashian. However, the acts didn't match the words and the securities fraud ended with a ludicrously inconsequential settlement. Musk was removed as the chairman but remained the CEO, so nothing much changed about the leadership.

And he had to promise that his tweets would be checked by the board, to assure that he doesn't deceive the market again. He and Tesla had to pay twice $20 million – which is pocket money.

As many people expected, the law means absolutely nothing for Musk and he totally ignored the order by the court. In fact, in December, he told a TV host that he had "no respect for the SEC" and not a single one of his tweets after his settlement was verified by the board.

He kept on posting tweets that were self-evident lies every day. Aside from ludicrous "good news" about his dying car company, his stupid followers could learn a lot about "Musk's science". Here he chose the best fuel for spaceships:

You don't need to study the previous discussion between the hardcore crackpots. Great. So Elon Musk says that "super money" deal with the spaceship propulsion by catching antimatter – and probably using the energy from the annihilation to move. The "approval" that Musk gets for his tweets from millions of people shows the dark side of the American (and indeed, not only American) education system.

You know, antimatter has had almost 14 billion years to annihilate against the prevailing matter. So not much is left. The average mass density of the Universe is just some "several atoms per cubic meters" and I generously overlook that most of this stuff is concentrated in stars etc. That's several GeV of \(E=mc^2\) per cubic meters. But, using the AMS cosmic rays data, the matter is (protons are) some 10,000 times more abundant than antimatter (antiprotons). So you only find less than one MeV or so in a cubic meter. An MeV is some \(10^{-13}\) joules. It is not hard to count how many cubic meters you need to "filter" to collect the antimatter for one joule of energy. And I am generously overlooking the fact that you can't really separate, catch, and store the antiprotons and if you could, the annihilation would lead to additional huge losses.

Money? Or even "super money"? What is this staggering crackpot talking about? And how stupid must be all the people who can't see that he is talking complete rubbish? As smarter kids in the kindergartens know, the outer space is almost empty. No macroscopic objects will ever be "powered" by this kind of an "energy source". (In fact, you can easily see that while antimatter is just 1/10,000 of \(E=mc^2\) in the Universe, fusion allows you to get to 1/1,000 if not 1/100 of \(E=mc^2\) – so fusion of all the scarce matter in outer space gives more energy than the annihilation of the available antimatter!)

To talk about "money" (he probably means "money" he wants to pocket in his lifetime) is even more ludicrous. And he produces lots of these things – not only about antimatter but about the gloriously comfortable life on Mars and similar lunacies. (Antarctica is vastly more hospitable and accessible than Mars – but we still don't see too many people who are moving there.) And he's not just talking about some fantasies. He is implicitly selling them as the guy who will bring you these things in your lifetime – because his lifetime is the period in which he already wants your money for all this nonsense to be transferred to his pockets.

But of course, his pseudoscientific talk isn't the real crime that the SEC cares about. Untrue data about his public company are. Despite the fact that he was already convicted for securities fraud half a year ago, he continued on February 20th:

Hours later, he "corrected" this tweet. 500k was "meant" to say 400k – while 500k a year could be the "rate" achieved at the end of 2019. Quite a "correction". There is obviously no way how his very clear original statement could "mean" the completely different statement. The original statement was a pure falsehood. Someone has probably told him that he couldn't really lie this much and that's why the correction was issued. (The 500k a rate a year is only imaginable with the China plant running, the Tesla document says, and the probability that it's running by the end of this year is virtually zero.)

Now, again, the production of 500k Tesla cars in 2019 is self-evident nonsense according to everyone who has a healthy brain and follows the company. But there are lots of people who don't quite follow the company and/or whose brains aren't quite healthy and these people may be deceived by this lie (well, it seems that most of these people actually want to be deceived and to become the victims makes them feel good – but it's still correct to call it deception). Note that some documents of Tesla foresee 300k-450k or something. According to Musk,

Even if a trustworthy and/or official Tesla transcript said "350k to 500k", the words "about 500k" that Musk used are still a deception because the interval "350k to 500k" isn't the same as "around 500k". In fact, none of these two is really the "subset" of the other because "around 500k" implies the presence of numbers that are both below and above 500k – while the 350k-500k interval is only below 500k (or the number precisely).

Musk, like most chronic liars, clearly interprets the word "truth" as "an infinitesimal resemblance to the truth or an infinitesimal overlap with the truth". That's enough to prove the truth for him (and apparently for his fans, too)! Well, it isn't enough for the honest people or the stock market regulator.

He just continues to lie about all these things. Because he chose lies to be his business model, he can't really stop. There is some degree of "inevitability" in these escalating lies – and his skyrocketing arrogance towards the regulator. Why? Because he wants to sustain his ludicrous lifestyle of a multi-billionaire although his business has been an utter failure from all relevant viewpoints. He wants his $20 stock to be sold almost for $300 so he needs quite a lot of manipulation to achieve that and maintain that. On top of that, he has probably leveraged some loans etc. and he needs the price of the stock – the stock that isn't worth more than $20 – to remain above $240 or so. Of course his lifestyle is constantly threatened by reality. Of course he needs to attack the real world – imagined foes who dare to say the basic truth, whether it's the SEC or the shortsellers or just impartial analysts such as myself – and he needs to do it increasingly intensely. His fanboys need a complete denial of reality for their religious faith to work – so everyone who "fails" to completely deny the reality must be their enemy.

OK, at any rate, the SEC charged Elon Musk with the contempt of court now. He clearly keeps on defying the previous verdicts and breaks his promises. The court must agree it is a contempt of court – well, it should. But can we see another inconsequential slap on a wrist? Everything is possible but I would bet it's unlikely. They must be really upset with him by now and they can't allow a random cheesy criminal to urinate on their faces anymore because their credibility would evaporate in general.

He should be finally removed from the CEO chair and the board – and he does deserve a jail time although I wouldn't bet much that he will be put in prison. But I think that the new bosses, whoever they will be, won't be able to avoid the bankruptcy within weeks or months.

P.S.: The stock only opened 2% lower on the news about the new SEC trouble and Musk's defiant reactions to them. It's just fudging incredible. Musk, the current CEO, has entered a direct fist fight against the SEC. A normal capitalist company would drop some 30% after such news. The long Tesla "investors" are America's counterpart of the Islamist groups.

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