At exactly 5:48pm (British Summer Time) 7 August 2018, Elon Musk sent out a tweet. It read:
‘Am considering taking Tesla private at $420. Funding secured.’
At 7:12pm (British Summer Time) 7 August 2018, he followed it up with:
‘Shareholders could either to sell at 420 or hold shares & go private.’
At 8:28pm (British Summer Time) 7 August 2018, Tesla Inc [NASDAQ:TSLA] sent out a tweet with a link. It read:
‘Taking Tesla Private’
The link was to an official announcement from Tesla. It was an email sent around from Musk about taking the company private. This would be put to a shareholder vote. Everyone gets to decide.
Now the issue here isn’t about the possibility of taking the company private. It’s an issue about market transparency. It’s an issue about information.
You see Musk’s first tweet was during the trading day. It was 12:28 EDT and the NASDAQ had only been trading for a couple of hours.
At the time of Musk’s tweet Tesla shares were trading around US$342.52. After his tweet the stock reached an intraday high of US$379.56.
However at 6:35pm (British Summer Time), some 47 minutes after Musk’s tweet, I tweeted something as well…
‘While the SEC themselves about #crypto Elon Musk goes and Tweets a price sensitive announcement indirectly manipulating $TSLA stock price and SFA is done about it **raised eyebrow emoji**’
The point I was trying to make is that Musk is out of control. No responsible company officer, no CEO, would tweet price sensitive information about their own company during market hours without an official company announcement.
Furthermore it should easily breach any disclosure rules the listing market might have.
The difference between eccentric and crazy
Imagine if the CEO of one of Australia’s medical marijuana companies tweeted they were being taken over by Canopy Growth at a 20% premium to their trading price. And imagine they did this during market hours.
The company would get its ass handed to it by the ASX. And the company’s CEO would have his position called into question for such irresponsible behaviour. The corporate watchdog would also have to investigate potential insider trading that could exist before the brain fade.
Except ‘Teflon’ Musk doesn’t get this kind of attention. Instead the Kool-Aid drinking Tesla fan club just calls him eccentric. It’s a part of his charm, they proclaim.
Well the difference between eccentric and crazy is eccentric people are rich.
This isn’t the first time Musk has gone on a price sensitive tweeting spree.
Last month in our sister publication Tech Insider, we wrote about Musk tweeting that Tesla had made 7,000 cars in a week well before the market announcement.
Then there was his ‘April Fools’ tweet about Tesla going bankrupt. And he also blew up at analysts asking the tough questions on an investor call.
Now he’s deciding to take the company private to avoid the intense scrutiny on the company.
In other words, as a private company he can be more secretive, more outlandish, more of everything a leader shouldn’t be…and get away with it scot-free.
And where’s the US corporate regulator in all of this? Nowhere.
Musk’s ability to get away with irresponsible corporate behaviour isn’t so much about his poor leadership (although it is). It’s also an indictment on the US and their ability to let the elite get away with anything they like.
Let me put it simply. The SEC is a wet squib. If they had any chutzpah they’d have fined Tesla long ago. And if the Tesla board had any sense, they’d move Musk on to another role.
But again, this isn’t so much about Tesla the company but about how we access information.
Also what needs consideration is who controls that information?
There’s nothing public about these companies
In Elon Musk’s case, he’s controlling the information he tweets out. Whether it’s wrong, illegal or otherwise is yet to be seen. We have our view, but we’re not the regulator.
But when it comes to the platform he uses most, Twitter, does Musk really have control? He’s free to put on Twitter what he likes. But ultimately it’s Twitter that decides if it’s okay or not.
And ultimately it’s Jack Dorsey — who runs Twitter — who has the ultimate power.
For example after Musk’s latest few blow outs, a number of people started renaming their Twitter accounts calling themselves Elon Musk. Some of them were just taking the piss. Some were trying to scam people out of crypto (that’s another story for another day).
Twitter was swift in their actions to ban anyone who renamed their account to Elon Musk.
Now if Musk is free to let market sensitive information out, then why aren’t I entitled to rename my Twitter account Elon Musk for a parody?
Think about it. The decision making there isn’t yours, Elon Musk’s or mine. It’s Twitter’s.
Another example is this recent furore with Facebook and Google banning right-wing pot-stirrer (and all round nut job) Alex Jones from their platforms. They’ve kicked him off because of his distorted views (and rants) on Facebook, YouTube and Instagram.
Ed Note: Twitter let him stay on.
It has kicked off the proverbial doo-doo storm in a teacup.
Now you might agree with Jones’s rants. Or like me you might think he’s a raving lunatic. It doesn’t matter. What matters is the control of Facebook and Google to kick him off their platforms. Thereby effectively trying to silence his voice.
Bear in mind that as far as we’re aware, even though he’s a bit ‘out there’, Jones hasn’t actively incited any violence on any particular group of society.
A lot of people think that Facebook and Google don’t have the right to kick him off.
Well here’s the reality folks. They do. They have every right in the world to choose who is and isn’t on their platform.
And I’ll tell you exactly why.
These are not ‘public’ companies. They are publicly listed. And any member of the public can invest in them. But it is not an open source, public access platform. It is a centralised, controlled platform run by a company with a hierarchy and controlling authority.
You do not have true freedom on these platforms. They can censor you or kick you off whenever they like. And there’s nothing you can do about it.
Even though Twitter let him stay, the point is that they (Jack Dorsey) let him. They made the decision. Just a select few power elites making decisions for the wider audience.
This is a dangerous situation but it’s a wake up call that you don’t have freedom on social media. You are under the control of people like Jack Dorsey, Mark Zuckerberg, Larry Page and Sergey Brin.
They choose what can or cannot exist on their platform because of the same old centralised control the world is used to.
If Twitter decided to play a more active corporate regulatory role they could swiftly remove, block or ban CEOs from making market sensitive announcements before the market announcement.
They have that power.
And maybe it’s not too far off until the SEC or other corporate watchdogs around the world ask for that help.
The world you know today is not a free one. At every pillar and post someone wants to influence or control your thoughts, your actions and ultimately your wealth.
For too long we’ve let that control grow. It’s our own fault. But now might be the perfect time to fight back and regain control.
It won’t be easy, and the powerful elites won’t just let their power go.
But there is a way out. Next week I’ll explain what that pathway looks like and how you can wrestle control away from the status quo.
Until next week,
Editor, Secret Crypto Network