Narcissism

Musk charged with securities violations

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Tesla CEO Elon Musk has been accused by the SEC of violating Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 [17 C.F.R. § 240.10b-5]. The SEC claimed,

“Musk’s false and misleading public statements and omissions caused significant confusion and disruption in the market for Tesla’s stock and resulting harm to investors…Musk knew or was reckless in not knowing that each of these statements was false and/or misleading because he did not have an adequate basis in fact for his assertions. When he made these statements, Musk knew that he had never discussed a going-private transaction at $420 per share with any potential funding source, had done nothing to investigate whether it would be possible for all current investors to remain with Tesla as a private company via a “special purpose fund,” and had not confirmed support of Tesla’s investors for a potential going private transaction. He also knew that he had not satisfied numerous additional contingencies, the resolution of which was highly uncertain, when he unequivocally declared, ‘Only reason why this is not certain is that it’s contingent on a shareholder vote.’ Musk’s public statements and omissions created the misleading impression that taking Tesla private was subject only to Musk choosing to do so and a shareholder vote.”

The eccentric and maverick CEO responded,

This unjustified action by the SEC leaves me deeply saddened and disappointed. I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way.”

It is common knowledge to corporates that the exchange is the first port of call for all public releases to be openly documented for consistency and equal access. It is irrelevant whether a social media feed might be deemed as “in the spirit” of open disclosure to Musk’s personal opinions. The SEC rules are the rules. There aren’t soft interpretations. A listing requirement is to follow the rules of fair disclosure. Whether Musk was or wasn’t aware is irrelevant – as the CEO of a $50bn company he should know better or at least sought the advice from those that do.

In any event if he was true to the spirit of good corporate governance he would have the good sense to realise his position as CEO has become untenable. How the board can have confidence in him is beyond CM? The multiple senior resignations give an insight but for all of Musk’s instellar cosmic brilliance as a salesman, unfortunately laws are there to provide safety for investors. The shares are offered 13% lower in the aftermarket.

A court will ultimately decide his fate but the $420 a share with secured funding unraveled so quickly as to question his judgement.

Investors, even the die hard believers, don’t need a CEO already under the pump to be distracted anymore than he already is. It is a shame because he is undoubtedly a brilliant mind. Unfortunately that would seemingly make him feel he’s somewhat untouchable leading him to make knee jerk decisions such is what he’s been charged over.

Tennis code violations – who is worse?

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Some argue that the 2018 US Open was biased against female players. In the singles men played 3,176 games in the recent tournament. Or 1.538x more than the 2,065 games played by the women. Yet the stats show men suffered 86 code violations vs 22 for the women or 3.91x. So on balance men 2.54x more likely to suffer a code violation than women on a per game basis. Is it the blokes are just more ill-tempered? If we use the 1.538x ratio of more games played, the boys get penalized (over the last 20 years of grand slam violations);

4.2x more for racket abuse

1.6x more for audible obscenity

2.8x more for unsportsmanlike conduct

2.5x more for verbal abuse

1.2x more for visible obscenity

1.5x more for time wasting

The girls get penalized more than boys in the follwing ways.

60% more for coaching

10% more for ball abuse

Although trying to compare ‘bias’ in tennis with respect to code violations is kind of irrelevant. Certain players ‘blow up’ more than others. McEnroe got many more warnings than Bjorn Borg.

Just for the record, at the US Open Djokovic had to play 136 games for his $3.8mn vs Osaka’s 86. So for each game Osaka earned $44,186 vs Djokovic’s $27,941. Maybe this is why he made his comments about men deserving to be paid more? If we look at the runner ups, del Potro won $17,961 per game vs Serena Williams’ $26,428. So Serena’s. 2nd place earned her almost as much as Djokovic win.

Naturally a better judge is not games played but viewership. The Serena Williams/Naomi Osaka final drew 3.1mn viewers on ESPN, more than the 2.07mn that watch Djokovic/del Potro the next day. If women get 1.5x the audience of the men in the final could one argue the men need to play 1.5x longer to earn the same? Arguably Serena was fighting to match Margaret Court’s record which was part of the boost.

To be honest women’s tennis can be more entertaining to watch in so far as frequent sustained rallies. Men’s tennis can often be a blast fest of aces and blistering returns of serve.

It is likely that Osaka will attract higher than average audiences going forward. Perhaps she is entitled to claim higher prize money than the men based on the extra attention she brings to the sport?

If we look at golf, Tiger Woods used to be paid $300,000 just for attending a tournament regardless of how poorly he finished. If Naomi Osaka helps click the turnstiles surely she deserves a cut of the gate?

Two diplomats and the bloke who said what everyone else was thinking

Yesterday CM wrote about the terrible sportsmanship of Romano Fenati who tried to cause a competitor to crash by grabbing his front brake during a race. Race winner Andrea Dovisioso and reigning world champ Marc Marquez gave diplomatic answers as to what punishment fits the crime but 3rd place getter Brit Cal Crutchlow told the refreshing truth – that Fenati’s team should have immediately fired him. Race Direction handed out a pithy 2 race ban. Fenati’s team agreed with Crutchlow.

Fenati’s team said,

Here we are. Now we can communicate that the Marinelli Snipers Team shall terminate the contract with the rider Romano Fenati, from now on, for his unsporting, dangerous and damaging conduct for the image of all. With extreme regret, we have to note that his irresponsible act endangered the life of another rider and can’t be apologised for in any way. The rider, from this moment, will not participate in any more races with the Marinelli Snipers team. The team, Marinelli Cucine, Rivacold and all the other sponsors and the people that always supported him, apologised to all the World Championship fans.

Is Musk losing it?

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Is Tesla CEO Elon Musk losing it? More senior resignations from accounting and HR this week  reveal more cracks in the automaker. He emailed a journalist, calling him a “mother f*cker”. He went further to say he hoped the cave rescuer he called a “”pedo” sued him because a UK man who is single and spent so much time in Thailand must be a child rapist.

He rattled off he had “secured” funding of $420/share to go private and then all of a sudden he didn’t, prompting the SEC to investigate. He was then on radio with comedian Joe Rogan toking what is reportedly a mixture of tobacco and marijuana. Are these the actions of a man running a $50bn market cap company?

Clearly his board can’t control him.  With the shares collapsing and bond prices falling, refinancing will become problematic. Chief  Accounting Officer Dave Morton quit the company after revealing his concerns about the various obstacles Tesla faces.

Tesla’s Chief People Officer, Gabrielle Toledano, took leave in August and said she wouldn’t be returning to Tesla.

Musk has been a genius and visionary to get Tesla where it is today. Yet he is a direct victim of his own hubris. Sleeping under boxes with Tesla bankrupt written on them to living on the factory roof to rattling off about production hell while accusing families of drivers dead due to over reliance in a system he aggressively promoted.Tesla was technically asking for suppliers to refund a portion of the monies they were paid since 2016 to the EV maker so it could post a profit which is borderline accounting manipulation in an attempt to give the impression of an ongoing concern.

He also complained at the lack of support in the media despite being called out on this nonsense.

Musk’s compensation is also linked to a $650bn market cap, which is effectively saying to the market that his company will be worth more than Daimler, BMW, VW, GM, Ford, Toyota, Nissan, Honda, Renault, Fiat-Chrysler, Ferrari and Porsche combined. Just read that last sentence again. Do investors honestly believe that Tesla which consistently misses and is going up against companies that have been in the game for decades, seen brutal cycles, invest multiples more in technology and forgotten more than they remembered will somehow all become slaves to a company which has no technological advantages whatsoever?

The Tesla story is on the ropes. Expect more mega-releases on new products to try to keep the dream alive and the disciples faithful. I guess ‘Lucy in the sky with diamonds’ worked for The Beatles…

Compelling student language

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Let’s not kid ourselves. Students are paying customers.  They may be there to learn but where does Sydney University get off marking student papers down on using language such as ‘mankind’, ‘workmanship’ or similar words in assignment work? Surely essays or theses should be marked on the quality of the content and validity of argument  rather than provide radical leftist lecturers a petty power trip by compelling student speech.

At what point does the Vice Chancellor tell the faculty staff to grow up and more importantly reprimand them for unprofessional and unethical behaviour? Instead of striving for global excellence to attract reputation, these teachers think that making gender neutral language is a higher goal. What next? Will students who express different views in a political science class than their lecturer be punished?

So much for universities being centres for open thought. Forget that. Hoist the red flag over the People’s University and await the next war on free speech. They recently had a win at the ANU preventing a school of Western Civilization. Forget whether there is ample demand from customers to choose of their own free will.

While some may view this as petty, the slippery slope follows. It was only last month when a Professor Peter Ridd was sacked from James Cook University because he exposed the unethical way his colleagues were manipulating data and conditions of the Great Barrier Reef to achieve the outcome they wanted. Apart from having no pride in preserving scientific integrity, the Vice Commissar figured cauterizing reality is another step toward higher learning.

Perhaps there should be centers for ethical excellence but it is unlikely many of the existing faculty would qualify to run them.  Another win for the Ministry of Truth.

Starbucks works harder to alienate customers

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This sort of in your face political correctness propaganda is becoming too much. Starbucks closed 8,000 stores on Tuesday and reached out to activists and bias training experts to put a curriculum together for its 175,000 workers to prevent “unconscious bias ”

While training staff is never a bad thing, do the human resources/ PR department at Starbucks honestly think that explicitly educating white people about their racism (if it truly exists on any scale to warrant the conscious bias based indoctrination) will do anything other than alienate more customers? What a smear on the majority of clientele and staff who no doubt exercise decency when transacting their skim milk doubleshot latte.

CM had an interesting chat earlier this year with a senior manager of a global corporation. He was recruiting but was told by his HR department that there is a risk he might have ‘unconscious bias.’ In order to mitigate those fears HR blanks out anything it deems might trigger it. Think of wartime correspondence from the front line to families at home.

Unsurprisingly he takes such things as a slight on his own character. That despite two decades of loyal service the company all of a sudden deems his judgement (which til then was never called into question) as something to regulate.

The irony of modern HR departments is that they seem to go out of their way to find out every detail on gender, race, religion and disability during the application process in order to enforce their own ‘conscious bias’.

Welcome to HR which is fast becoming the Ministry of Truth in Orwell’s 1984.

Calling Ivanka a c*nt

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In what world do liberals live where they can openly make and celebrate insults about the President’s daughter or anyone for that matter in this way? Do they not get that these are the very things that help the very man they want out of the office to stay in the role for 7 more years? Didn’t Samantha Bee or Sally Field hear Michelle Obama’s  “when they go low, we go high” speech?

Even if you were to accept and acknowledge the jaundiced liberal view of her father for all of his shortcomings, how amazing that she has turned out so well mannered, measured and intelligent! What a slur to suggest she is weak, dishonest, ugly and neglectful. Perhaps even worse some tried to defend Field claiming she didn’t call her a c*nt. In fact there can be no doubt she thinks Ivanka is worse than that.

Celebrate Roseanne Barr’s axed program for her inappropriate tweets but why not defend poor behaviour period, not just when it your own side? Why does the ABC sponsor The View with Joy Behar’s insults of The VP having a mental illness?

Ivanka tweeted a picture of a loving mother and her child and copped a belting for being insensitive to illegal immigrant children when they overlook the facts about decades-long standing legal procedures. How soon the liberals forget how composed Ivanka was on a JetBlue flight with her kids in economy when someone launched a full blown tirade at her. How embarrassing that she didn’t live up to the left’s distorted picture of her? What fool would rant at anyone when their kids were present? These are the people we should take lessons from in terms of values?

Apart from the hypocrisy that courses the veins of Hollywood, it is sad to see society descend to such low levels as to discard any level of common decency. The Flying Nun has crash landed.