MARIA: WELCOME BACK ELON MUSK IS
UNDER FIRE THIS MORNING, THE
SECURITIES AND EXCHANGE
COMMISSION LAYING OUT THE
DETAILS OF ITS LAWSUIT AGAINST
THE CEO OF TESLA.
IT ALL STEMS FROM MUSK'S TWEET
LAST MONTH ALLEGING HE SECURED
FUNDING TO TAKE TESLA PRIVATE.
>> TODAY THE SEC FILED SECURITY
FRAUD CHARGES AGAINST ELON MUSK,
THE CHAIRMAN AND CEO OF TESLA
MOTORS STEMMING FROM HIS
AUGUST 7TH, 2018 STATEMENTS
DISSEMINATED OVER TWITTER THAT
HE WAS CONSIDERING TAKING TESLA
PRIVATE.
WE ALLEGE THAT MUSK STATEMENTS
WERE FALSE AND MISLEADING
BECAUSE THEY LACKED ANY BASIS IN
FACT, THE SEC'S COMPLAINT FILED
EARLIER TODAY IN SOUTHERN
DISTRICT OF NEW YORK SEEKS A
FINDING THAT MUSK COMMITTED
SECURITY'S FRAUD AND INJUNCTION
PROHIBITING HIM FROM DOING SO IN
THE FUTURE, CIVIL PENALTIES AND
A BAR PROHIBITING MUSK FROM
SERVING AS OFFICER OR DIRECTOR
OF A PUBLIC COMPANY IN THE
FUTURE.
MARIA: MUSK RESPONDED TO THE
LAWSUIT IN A STATEMENT, HE SAYS
THIS, UNJUSTIFIED ACTION BY THE
SEC LEAVES ME DEEPLY SADDENED
AND DISAPPOINTED.
I HAVE TAKEN ACTION IN SEEK OF
TRUTH OF INVESTORS.
INTEGRITY IS THE MOST IMPORTANT
VALUE IN MY LIFE AND FACT WILLS
SHOW I NEVER COMPROMISED IN ANY
WAY.
JOINING US TIM HAGEN, THANKS
VERY MUCH FOR WEIGHING IN, YOUR
REACTION TO THIS, IS THIS THE
BEGINNING TO HAVE END FOR ELON
MUSK?
>> SURPRISING HOW QUICKLY THE
SEC MOVED ON THIS.
THESE THINGS USUALLY TAKE MONTHS
IF NOT YEARS.
HERE THEY ARE OUT, YOU KNOW,
WEEKS AFTERWARDS REALLY
SUGGESTING THAT IT'S TO THEM AN
OPEN AND SHUT CASE, YOU KNOW,
YOU COULD SMELL SOME TROUBLE FOR
TESLA REALLY WITHOUT ELON MUSK
AT THE HELM.
MARIA: THAT'S WHAT I WANT TO ASK
YOU ABOUT, FIRST LET ME GET YOUR
REACTION, GARY.
>> TWO TAKE AWAYS, ONE NORMALLY
THE SEC SETTLES THESE THINGS --
FAR AHEAD OF ACTIONS LIKE THIS.
TWO, I WILL ASK TIM, I THINK IF
MUSK IS REMOVED IT DESTROYED
TESLA, WHAT ARE YOUR THOUGHTS?
>> THAT'S A GOOD QUESTION, YOU
KNOW, THERE'S NOT A LOT OF
COMPANIES WHERE THE CEO AND THE
BRAND ARE SO INTERTWINE, YOU
HAVE SEEN THE STOCK SOAR IN
RECENT YEARS THAT'S AND A LARGE
PART BECAUSE OF INVESTOR
ENTHUSIASM FOR ELON MUSK VISUAL
FOR TRANSPORTATION, NOT HAVING
ELON MUSK THERE COULD SPELL SOME
TROUBLE FOR THEM RAISING FUNDS,
THEY NEED TO PROBABLY RAISE SOME
MONEY, ARE PEOPLE GOING TO BE AS
EXCITED TO BE IN THAT STOCK, ARE
THEY GOING TO BE AS EXCITED TO
BE BUYING THE CARS?
MARIA: STOCK IS DOWN 10%, DAGEN.
DAGEN: TIM, RAISES THE ISSUE IN
TERMS OF THE SEC IS LOOKING TO
BAR ELON MUSK FROM BEING A TOP
EXECUTIVE FROM SERVING AS
OFFICER OR DIRECTOR OF ANY U.S.
PUBLIC COMPANY, IT RAISES THE
ISSUE OF THE SEC IS IN A
POSITION WHERE THEY ARE GOING TO
WIPE OUT POTENTIALLY THE
SHAREHOLDER -- $50 BILLION IN
SHAREHOLDER VALUE WHEN THEY DO
LITTLE TO ACTUALLY PROTECT SMALL
INDIVIDUAL INVESTORS, THEY HAVE
TO THINK ABOUT THAT AND MAYBE
ELON MUSK IS LOOKING AT SAY MARK
CUBAN SAYING, I CAN FIGHT THIS,
CLEAR MY NAME, I'M NOT SETTLING.
>> YEAH, IN A LOT OF WAYS THIS
IS ALMOST CLASSIC ELON MUSK.
HE LIKES TO PUSH BACK WHEN HE
FEELS HE IS WRONGED.
LI REPORTED THAT PERHAPS THERE
WAS A NEGOTIATION FOR A
SETTLEMENT THAT THE SEC THOUGHT
THEY HAD AND ELON'S LAWYERS
CALLED AND SAID, NO, WE ARE NOT
GOING TO GO THAT ROUTE, IF YOU
LOOK AT HIS STATEMENTS FOLLOWING
THAT TWEET IN AUGUST AND SINCE
THEN, HE HAS BEEN MAKING THE
CASE THAT IN HIS MIND HE THOUGHT
THE FUNDING WAS THERE.
OF COURSE, THE SEC IS SAYING,
NOT SO FAST, BUT IT REALLY GETS
TO THIS KIND OF THE WAY SILICON
VALLEY IS OPERATING, TO BE
ENTREPRENEURIAL LIKE HIM HE HAS
TO KIND OF CREATE HIS OWN
REALITY, YOU KNOW, HE WAS TOLD
FOR MANY YEARS HE COULDN'T MAKE
ELECTRIC CARS COOL, HE'S BEEN
ABLE TO DO THAT.
WE HAVE SEEN HIM IN RECENT YEARS
REALLY PUSH BACK AGAINST
REGULATORS AND LET THEM DO --
LET HIM DO THE THINGS HE WANTS
TO DO.
>> TIM, IT'S LIZ PEEK, GOOD
MORNING, WHAT DO YOU THINK ABOUT
THE SUCCESSION ISSUE HERE?
>> WELL, THAT'S A HUGE QUESTION
IN BASICALLY THE LAST TWO YEARS
OR SO, WE HAVE SEEN HUGE EXODUS
OF TOP EXECUTIVES FROM THE
COMPANY, IT'S NOT AN EASY PLACE
TO WORK.
IN RECENT MONTHS WE HAVE SEEN
TOP SALES EXECUTIVE AND
ENGINEERING CHIEF LEAVE, THESE
ARE PEOPLE THAT WOULD HAVE BEEN
PERHAPS NATURAL NUMBER TWO'S OR
PEOPLE THAT COULD TAKE THE
WHEEL, IF YOU WILL, BUT NOW THEY
ARE GONE AND THE BENCH IS NOT
VERY DEEP.
MARIA: YEAH, BY THE WAY YOU SAID
HE BELIEVED WHEN HE DID THE
TWEET HE HAD THE FUNDING, ARE
YOU SAYING HE BELIEVED THE
FUNDING WAS $420 A SHARE OR WAS
THAT SOME KIND OF A JOKE?
>> WELL, YOU KNOW, IN THE
COMPLAINT THAT WE READ THERE HE
BASICALLY SAID, WELL, I HAVE TO
DO A PREMIUM ON WHERE THE STOCK
IS, IT'S GOING TO BE AT 419, YOU
KNOW, 420, THAT WOULD BE FUNNY,
MAYBE THAT IMPRESSED HIS
GIRLFRIEND, IN PRESS BLOG POSTS
THAT HE PUT OUT, HEY, YOU'VE HAD
MEETINGS WITH THE SAUDI
SOVEREIGN WELL FUND, HE THOUGHT
THAT THEY WANTED TO HELP HIM GET
THE COMPANY PRIVATE AND GET
SOMETHING DONE.