On my show this past Friday I posed the question above. The reasoning is simple: sometimes what appears to be the most outlandish or bizarre may in effect be quiet rational and deliberate.
Let me make a statement before I go on any further. What I’m proposing is nothing more than what one needs to do when they are in business. e.g., Think for themselves and try to make or assemble conclusions for their own comprehension when a situation appears to be void of any. i.e., More often than not people focus on the “madness” rather than to see if there is any intentional method behind that madness.
Whether or not I’m correct is not the point. And I’m not accusing Mr. Musk of the above either. What I am bringing your attention to is this: when there seems to be no rational answers when trying to surmise what a company may or may not be doing, and your money may be at stake, whether through business dealings such as a supply, distribution, investment, etc. You must consider everything. Even if that means considering something untenable to your own core of business thinking. The stakes to your own business depend on it.
Again, the reason why I’m asking you to contemplate the seemingly unfathomable is because, with a business/financial media that has made the term “sycophant” an understatement when reporting on anything Silicon Valley over the last 10 years, (hint: see these two links: Elizabeth Holmes of Theranos™ for clues) you’re going to have to ask yourself the questions that the mainstream business/financial media both don’t, and worse: won’t. Especially if you may be a: competitor, vendor, investor, and yes, even an employee, for those with the wherewithal.
To say both Elon and his company Tesla™ has found itself roiled in some controversy may be the understatement of the century. Both Mr. Musk and Tesla seem to be finding the once fawning press to be doing everything in its power to distance itself. Most, if not all the stories I’ve seen recently fall second fiddle in analysis and commentary to the only thing that matters: Tesla’s share price.
Musk’s behavior? A one line mention. The share price resilience to the behavior? The rest of the entire analysis. Any negative connotations to the shares slumping? Maybe a quick blurb followed with, “And in other news blah, blah, blah.”
Elon (I use the familiar only for ease) has suddenly found himself smack dab in the middle of some very serious accusations. The problem today is that these once glossed over type of insinuations for “It’s just Musk being Musk” type of outbursts or behavioral quirks have morphed and veered directly into the path where criminal charges may be attached. His most recent “funding secured” statement alluding that he had the ability to take Tesla private, is just one.
And yes “just one” is accurate.
Yet, it is this latest one that appears to have put real pressure on everything Tesla and Musk in particular. Why?
Hint: $Billions upon $Billions of dollars were both wiped out, as well as many in the opposite extreme. e.g., ill-gotten gains. His “tweet” (something else the S.E.C. is now looking into for rampant stock manipulation via others) caused a reaction in the shares, forcing many a Short to cover at losses, as well as many a Long the ability to cash out at far higher prices.
These type of scenarios usually happen, albeit rarely, when some weird form of technical issue is known to be the root cause and the exchanges usually and quickly step in to “break” the resulting trades. e.g., nullify. However, this one has been neither nullified, or been the result of a “technical glitch.”
It was Musk himself, and by himself, using the platform (e.g., Twitter™) again, that the SEC was already beginning to focus on for possible violations and/or sanctions by others.
Understanding and combining the aforementioned probe in conjunction with the blatantly tone-deaf behavior to use it by Elon may just be one the “one tweet too far” that sticks the “camel’s nose” known as the SEC under the now infamous “tent” of production found at Tesla.
And for those not familiar with the old adage of “the camel’s nose.” Hint: Once the nose is under – so too comes the rest of the camel.” Or said differently: The rest of the bureaus with their document seizing and computer confiscating agents.
Now: Enter Elon going on a program allowing himself to be video’d openly smoking weed.
There was Elon partaking in smoking a joint, on camera and smack dab in the middle of impending legal issues, not to mention the strain of such it would put on his company, in particular – its Board. Again: Why would someone, by all accounts who has managed to elevate himself into the lexicon of “brilliant entrepreneurs” do something so blatantly stupid?
Maybe acting so “blatantly stupid” isn’t so crazy as many may think at first blush. Here’s the reasoning:
Personally, I have some great admiration for Musk. Whether or not one agrees with his handling of his businesses and the way he runs them (and just to be clear, of that I’m neither a fan nor a supporter) his determination to originally build and deliver an electric vehicle that was light years ahead in style and feasibility than all the majors combined was astonishingly noteworthy. His SpaceX™ aspirations and accomplishments fall into the same.
Running the “business side” of things? Not so much. But that’s just me.
Being a once brazen “no holds barred, spend as much as you can, ask questions later” has been the go-to resolve for anything born in Silicon Valley this past decade. But now? Since the elimination of the Federal Reserve’s quantitative easing programs, along with its subsequent balance sheet roll-offs and interest rate hikes. Let’s just say “it’s different this time” has an extremely different connotation that it once held.
Now the questions being asked that were never asked during its original incarnation have gone from, “Here’s my money, spend it how you see fit!” To now, “I’m going to have a fit. Where’s my money? What do you mean you ‘spent it all!?'”
And no one is finding their once “rarefied air” has turned into exhaust fumes more than the once wunderkinds of Silicon Valley. (Hint: See Facebook™ et al. for even more clues)
Now, enter in the SEC.
There is a very real possibility that Elon may be facing some very serious criminal charges that have possibility of “jail time” contained within them.
If we are to think of Elon from the “brilliant” side rather, than the “blatantly stupid” side of his latest escapade. One can see (or at least contemplate) there might be some method to this madness.
What far too many have already forgotten, as well as seemingly no longer care about, is the fall from grace of Theranos along with its founder Elizabeth Holmes.
And yes, may be the general public (along with its once fawning business/financial media) has lost its appetite for that narrative. But if you’re a lauded Silicon Valley leader in tech with possible upcoming SEC legal issues? I’ll bet dollars-to-doughnuts you’re watching the still evolving developments with a very watchful eye, along with legal team.
Although Holmes and Musk are two completely different operations, their legal troubles draw on some very similar themes. i.e., They both involve the SEC and they both have risk issues pertaining to either, death as in Tesla’s ongoing autopilot issues. Holmes with testing putting patients at risk, if not exacerbating prior risk with deadly resolutions down the road.
Holmes (along with her once boyfriend and business partner) is facing criminal charges. Musk could (and I use that term “could” because this is all conjecture on my part) be in for the same type of treatment for discovery should things turn against Tesla in any upcoming legal issues.
That, and any charges pertaining to: fraud.
Fraud is a very subjective term when it makes its way into the legal arena. Where one sees diligence trying to maintain any semblance of order when conducting business – another can see intentional fraud in trying to cover up what seemed clearly as a failing endeavor.
Outcomes are rarely seen as “cut and dry.” That’s why having the right legal team matters, along with the ability to pay. For the government has unlimited resources and will use them, for many a case has been won-and-lost on narrative alone, regardless of facts.
And it is here where Elon may be playing or, setting the stage, for his own “legal narrative of defense.” Here’s what I’m driving at…
Holmes (using her for example purposes only) tried keeping up the persona that everyone was against her when the legal issues began to unfold. The more illegalities that came to light – the more she seemed to double down on her appearance of the “brilliant” entrepreneur besieged by a world of irrelevant technicalities or others that just “didn’t get tech.”
Musk on the other hand has doubled down on a the persona of a CEO in the midst of a physical or psychological breakdown, because of the enormous stresses he’s under trying to satisfy (or make good) on promises he’s made prior against the forces of those pesky non-belivers known as “Shorts.”
In other words, as the legal issues continue to rack up – Musk is doing the exact opposite compared to Holmes. i.e., Allowing the narrative to be spun (that is, if it is, for remember, this is all just a thought exercise I’m proposing) that he’s not some diabolical manipulative evil “genius” trying to fraud people or investors.
Imagine for a moment this: what’s possibly being laid out, for possible defense purposes, is the “worked himself to death trying to fulfill promises” defense.
After all, what CEO in their right mind would take to a platform that has the potential for upcoming SEC scrutiny for being used in violation for stock manipulation and openly state he was thinking about going private – and – state the “funding secured” when he knows right well what such a statement would mean to his credibility, not to mention liability if it wasn’t for the fact that he was having some sort of breakdown?
Again, if we play this out in theory, is it so far-fetched to hear in some court should the need arise make the following argument:
“Dear members of the jury just look at my clients actions only days following the SEC launching an investigation. He goes on a popular podcast, knowingly being recorded on audio and video discussing his company among other topics and then – openly smokes weed. Does that sound like a person that is in control of his faculties or, is this someone who is past the point of stress and has moved into the area where medial council should have been sought?”
Are you beginning to see my point?
Now I’m quite aware that Elon has made some bizarre statements and more prior. But (and it’s a very big but) could the latest “weed controversy” be more of a doubling down to make relevant past transgressions for possible future defense narratives should the circumstances warrant?
Here’s what I know: If I were in Elon’s shoes at this moment looking at the possibility of criminal charges and more coming down the pike possibly sooner rather, than later. And, I’ve also been well aware, as well as followed the plight of Elizabeth Holmes and how things are stacking up against her and her once heralded company during this still evolving fall out, all while making or taking mental notes on how she conducted herself during all of it. I might conclude that my best defense may not be one of stoic type strength, but rather: out of control good intentions run amok caused by enormous stress trying to keep all prior promises.
The result? A different form of the “insanity defense.” i.e., Sure take most of my money, just don’t take my freedom.
“Sounds a bit crazy” you say. It’s a fair point but let’s just contrast and compare for a moment playing out my conjecture.
Elizabeth Holmes loses everything in the end. e.g., Her money, her business, her reputation, along with, possibly, her freedom. She’s now a pariah when it comes to the business world.
He loses (again, only for example purposes) most of his money, possibly, still leaving him wealthy beyond most. He loses his company, but it is purchased by a rival such as GM™ or other and his vision lives on. His reputation either stays intact (amongst certain circles) if not grows further, because he is seen in many an eye as, not some devious entrepreneur, but one that tried “too much, and took on too much” and was overwhelmed and paid the ultimate price of losing his business. i.e., becomes the face as a business executives martyr.
And last but certainly not least, doesn’t face jail time, because – It wasn’t intentional – he was “insane!” type or legal posturing and defense.
If you had the resources to pay for the legal advice Mr. Musk is assuredly has been afforded: Would you not expect someone on your legal team to offer some, if not all of the above? Doesn’t mean you’d take it, but I do know this…
If I’m thinking it, I’d be damn upset if my legal team hadn’t suggested similar before I did. Therefore, if I’m thinking it just by casual observation and construction?
I have to by fault, consider that it is entirely possible. Especially when it seems to settle so many unexplainable results.
As always, we shall see.
© 2018 Mark St.Cyr