Tesla, Inc. (NASDAQ:TSLA) Question authority… and the authorities will question you
Elon Musk’s lawyers have now answered the court regarding the SEC’s attempt to have them hold Tesla’s CEO in contempt and it details how the federal agency is going after the automaker and its leaders in quite an absurd way over some arguably meaningless tweets.
Shayne Heffernan CEO of HEFFX said “while I may not be a fan of Tesla, it is detrimental to all entrepreneurs and shareholders to have heavy handed regulators like we see in the USA”.
In October, a judge approved the settlement of the SEC’s complaint against Musk over his “funding secured” comment about his attempt to take Tesla private.
One of the terms of the settlement is that Tesla’s board would have to get more oversight of Musk’s tweeting, which would need to be restrained when it comes to statements that could move Tesla’s stock.
They argued that it was new information that should have been pre-approved by Tesla before he could tweet about it.
A judge gave Musk two weeks to explain why he shouldn’t be held in contempt of his agreement with the SEC.
In a quite absurd situation, the CEO’s lawyers have now produced a 33-page document defending the benign tweet.
Musk’s lawyers argue that the information was not material:
“The 7:15 tweet was a shorthand gloss on topics that had already been covered in depth in company filings and an earnings call with analysts. Any reasonable investor would have read the tweet with reference to the much more thorough disclosures and extensive discussions on the same topic.”
They go into details about where and when the information was already disclosed prior to the tweet:
“Prior to Musk’s posting of the 7:15 tweet, the subject matter and substance of the tweet— i.e., Tesla’s projected production and rates of production for 2019—had been publicly disclosed in multiple documents and discussed at length in an earnings call. As noted above, on January 2, 2019, Tesla filed a Form 8-K reporting its Q4 2018 production of “25,161 Model S and X vehicles, consistent with our long-term run rate of approximately 100,000 per year.” Ex. 1 at 5. Then, during the January 30 Earnings Call, Musk stated that Model 3 production in 2019 would be on the order of “350,000 to 500,000” vehicles. Ex. 3 at 8. Tesla similarly disclosed in its January 30 Update and February 19 Form 10-K that it was “targeting annualized Model 3 output in excess of 500,000 units sometime between Q4 of 2019 and Q2 of 2020.” Ex. 4 at 3. Thus, whether one adds the production estimates for the three models (S, X, and 3) together or even considers projections for the Model 3 alone, Musk’s statement that Tesla would make “around 500k” “cars” in 2019 was within previously disclosed ranges. The tweet simply was not “news.””
The document also details how the SEC sent several inquiries with short deadlines to Tesla and Musk about the situation in their attempt to show that the tweet violated the settlement agreement.
Musk’s lawyers argue that what the SEC is doing amounts to an “unconstitutional power grab” and they suspect that it is retaliation for what Musk said about the SEC in a recent interview.
In a 60 minutes interview, Musk said that he has “no respect” for the SEC and he alluded that he believes the agency is working to help the shorts betting against Tesla.
The lawyers wrote in Musk’s defense:
“During the interview, and consistent with his First Amendment rights, Musk was sharply critical of the SEC. The SEC’s heavy reliance on this interview in its motion for contempt smacks of retaliation and censorship.”
They claim that the SEC is inviting the court “to trample on Musk’s First Amendment rights” and they request to reject the attempt to hold him in contempt.
More back and forth between the two parties is expected before a decision is made.
Here’s the full filing with the court:
gov.uscourts.nysd.501755.27… by on Scribd
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 311.40.
The projected upper bound is: 315.38.
The projected lower bound is: 250.03.
The projected closing price is: 282.70.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 65.5193. This is not an overbought or oversold reading. The last signal was a buy 2 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 41.86. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 125 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -53. This is not a topping or bottoming area. The last signal was a buy 2 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 6 period(s) ago.
Rex Takasugi – TD Profile
TESLA INC closed down -7.560 at 283.360. Volume was 4% below average (neutral) and Bollinger Bands were 26% narrower than normal.
Open High Low Close Volume___
286.490 288.070 281.060 283.360 7,504,137
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 290.26 309.40 316.39
Volatility: 71 66 75
Volume: 12,397,150 8,454,384 9,293,272
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
TESLA INC is currently 10.4% below its 200-period moving average and is in an downward trend. Volatility is Our volume indicators reflect volume flowing into and out of TSLA.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on TSLA.O and have had this outlook for the last 14 periods.