Tesla shares were down 11% after news broke that the SEC is suing CEO Elon Musk and the company itself for fraud and seeking to have Musk removed as CEO. The charges stem from Musk’s tweet that he’d secured funding to take the company private.
Soon after Musk’s tweet, Tesla stocks shot up 11% as investors scrambled to lock in below the $420 projected take-private price.
Musk claimed that he was in talks with the Saudi sovereign wealth fund to actually make the move when pressed.According to the complaint, Musk had sent the tweet even though he hadn’t discussed the plan with investors. In fact, the complaint alleges that he knew it wasn’t even possible. But the best part of the documents filed in a Manhattan court? That Musk chose $420 because of its significance in marijuana culture (and to impress his girlfriend). You can’t make this sh*t up, folks.
In addition to being removed from Tesla, Musk would never again be allowed to hold a corporate officer or director positions at any public company, if the SEC gets its way.
Water Cooler Talking Point: “Welp, I guess that settles it, we can be held accountable for things we say on social media. If you need me, I’ll be scrubbing my Twitter feed dating back to 2009.”
*Cue the Kenny Loggins*
Boeing outdueled Lockheed in a $9.2B dogfight. The Seattle based aerospace giant won a 10-figure contract that will give it the honor and privilege of manufacturing up to 475 Air Force jets which will hone the next generation of Maverick’s to buzz the tower. Because, nobody likes Iceman.
The deal completes a hat-trick of Pentagon W’s for Boeing. The latest three comma contract comes on the heels of a $13B deal to build MQ-25 refueling drones and a $2.38B Huey helicopter order. Partnering with Uncle Sam will bolster Boeing’s defense division which made up only 23% of revenue last year, down 50% from 2010.
But putting a boot in the ass of America’s foes isn’t Boeings only business. As part of a joint venture with Lockheed Martin, called United Launch Alliance, Boeing awarded a Vulcan Rocket engine contract to Jeff Bezos’ Blue Origin yesterday.
Water Cooler Talking Point: “Anyone else got the need, the need for speed?”
Petróleo Brasileiro SA, aka Petrobras, Brazil’s semi-nationalized oil company, agreed to pay an $853M settlement related to a massive bribery scandal. The investigation by Brazilian and US prosecutors began in 2014.
Petrobras’ board admitted that executives were making illicit payments to Brazilian politicians and political parties dating as far back as 2004. As a result, said politicians wouldn’t launch investigations into the billings of Petrobras. At least 4 of the company’s top executives were convicted of bribery and sent to jail, and even former President Luiz Inácio Lula da Silva did some time in Brazil’s Clube Fed.
$682M of the fine will be distributed to a vaguely defined “Brazil fund,” for promoting corporate transparency, and the remainder will be split by the US DOJ and SEC.
It appears that investors liked the deal. The stock price rose 5% yesterday.
Water Cooler Talking Point: “As any good corruption scandal fanatic knows, the key ingredient to successful fraud operation is outrageous construction bills. Yeah, I watch Ozark.”
