Elon Musk Is Learning Just Because He Thinks Something Is True Doesn’t Make It So
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A month ago, I observed there would be consequences for Elon Musk’s recklessness, if not for the other guy whose behavior his so resembles, Donald Trump. That reckoning came Thursday with a suit against Musk by the U.S. Securities and Exchange Commission. The regulator charges the Tesla CEO with making misleading claims and seeks to remove him from his job.
The case against Musk seems obvious. In early August, he tweeted the news that he would take Tesla private, sending the automaker’s shares soaring. By pulling a number out of nowhere—$420 per share, a marijuana reference he made to amuse his girlfriend, says the SEC—Musk bamboozled his shareholders. He fibbed further, conflating preliminary discussions he’d had with a sovereign wealth fund with having secured funding for a deal.
The SEC couldn’t resist at minimum making an example of Musk. It can’t tolerate having a fabulist as the head of a public-shareholder-owned company. Musk will argue that he had no doubt the funding for a take-private deal was in the bag, and therefore that he told the truth. He’ll likely learn that just because he thinks something is true doesn’t make it so.
Nobody forced Musk to take money from public investors, of course, and he no doubt figured out that for many reasons he wishes he hadn’t.
Tesla’s shares plunged on the prospect of life after Musk. Breakingviews cleverly posits that a Musk-less Tesla will reveal the true value of the innovative but financially challenged company.
The hoo-hah that is Salesforce’s Dreamforce conference is generating real news, like new software alliances. (Here’s the healthcare panel I moderated there Wednesday.) Longtime software analyst Pat Walravens smartly notes that two distinct camps are emerging in the software world. “The most interesting new development in the competitive landscape is the way the battle lines are being drawn between Salesforce, Google, and Amazon, which announced new strategic relationships this week,” he wrote to clients, “and SAP, Adobe—soon acquiring Marketo—and Microsoft on the other side, which announced the Open Data Initiative on Sept. 24.” This bears watching.
One must read and one must watch: Robert Hackett’s profile of prosecutor-turned-investor Kathryn Haun and Mellody Hobson speaking at Brainstorm Reinvent this week on the appalling lack of corporate diversity.