From Whitney Tilson’s email to investors -Tilson has some strong feelings about Elon Musk’s Tesla Motors Inc. (NASDAQ:TSLA), and Elizabeth Holmes’ Theranos – find an excerpt below.
4) I thought the incomparable Carol Loomis, perhaps the greatest business writer/journalist of all time, was retired, but she keeps coming out with great stuff. Her latest is catching Elon Musk failing to disclose highly material information to investors (the death of a Tesla owner using the company’s much-hyped autopilot technology) before selling $2 billion worth of stock, including ~$600 million personally, which sent the sanctimonious Musk into a frenzy:
Musk replied in a second e-mail, “is not material to the value of Tesla.”
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He continued, “Indeed, if anyone bothered to do the math (obviously, you did not) they would realize that of the over 1M auto deaths per year worldwide, approximately half a million people would have been saved if the Tesla autopilot was universally available. Please, take 5 mins and do the bloody math before you write an article that misleads the public.”
5) Fortune’s Stephen Gandel with the follow-up story:
Musk told Fortune via email that the deadly crash wasn’t “material” information that Tesla investors needed to know. After the article appeared on Tuesday, Musk called the article “BS” in a tweet and said that the fact that Tesla’s shares rose on Friday following the accident’s disclosure showed that the accident wasn’t material.
But back in early May, Tesla said exactly the opposite of what its founder is saying now in an SEC filing. The company warned investors that a fatal crash related to its autopilot feature, even a single incident, would be a material event to “our brand, business, prospects, and operating results.” The disclosure said that the company may face product liability claims due to “failures of new technologies that we are pioneering, including autopilot in our vehicles,” adding that “product liability claims could harm our business, prospects, operating results and financial condition.”
What’s more, Tesla noted that it does not carry insurance against such events. Were the company to be sued because of a death related to, say, its autopilot feature, it could result in a “substantial monetary award” that would have to be paid from “company funds, not by insurance.”
6) This story keeps getting more and more crazy – is Elizabeth Holmes not only a pathological liar, but totally nuts???
Ms. Holmes maintains a heavy security detail. Men with earpieces escort her wherever she goes outside the Palo Alto headquarters. Their code name for her is “Eagle 1,” current and former employees say. Mr. Balwani, until he retired, was “Eagle 2,” they say.
Despite the meetings with attorneys, Ms. Holmes still finds time to work on her external messaging. Several weeks ago, she traveled to New York and met with the television host Charlie Rose, the person who recently interacted with her said. Mr. Rose didn’t respond to an email seeking comment.
She has also been talking with Jason Blum, who was executive producer of HBO’s “The Jinx: The Life and Deaths of Robert Durst,” about a potential documentary that would chronicle her life and career, people familiar with the matter said. Mr. Blum’s production company didn’t respond to an email seeking comment.