Could Tesla Shareholders Take Legal Action Against Chanos?

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Now the point here would not be to quell speech that is critical of corporations but to address a particular deep conflict of interest that is unnecessarily damaging to Tesla investors and by extension the public interest in working investment markets and which creates gain in an apparently ill-gotten way for the person engaging in the conflict of interest in a way that is also fully intentional or calculated. Again the point is not to set up a precedent for slander against corporations at all. After all, F. corporations in general.

What Chanos is doing seems to have the same kinds of conflict of interest and severity as insider trading. It might be worse. If you look at his history it seems likely that big oil set him up to attack natural gas with Enron and now he is attacking another threat to big oil in Tesla plausibly on the behalf of the same group. All very transparent, its not like Enron was some stroke of genius, it was obvious to anyone in the ultra corrupt petrol industry.

Here is the rub, he routinely puts out press releases (paying captured media for a platform should provide no cover) where he apparently quite factually makes statements that intentionally grossly misrepresent Tesla and its value in order to create personal financial gain- presuming he shorts Tesla or is benefited directly financially by people who do short Tesla. This is quite different than spouting off to drive the value of a stock he is invested up- in that case there would presumably be too much slippage or to much of a proximate issue even as this could also be a negative consequence but might still be added in a compounding of damage given the short(?)

If you wanted to be charitable you might say he felt the US national security is centered on petrol and it was misleading the investing public to allow them to think that would change or Tesla would be allowed to survive or prosper. Or maybe its a preference for white power and slavery, don't know the motivation, don't have to as the intention seem clear.

So for instance he is routinely representing a firm as a sham and valueless or having zero value that knocked the biggest automakers in the world on their buts in their highest margin most profitable most technologically advanced sector- has consistently taken share from their most ego and prestige involved sector and had done this for about 6 years now and decimating their share. Its a firm that has Panasonic as a partner and before that Toyota and Daimler. Its a firm that more frequently now is the highest market cap auto maker in the US. Its a firm with more than half institutional ownership including 5 billion from TRowePrice. Its a firm that has SpaceX as a sister company. Its a firm whose CEO was voted most admired above every other CEO alive or dead globally by CEOs globally by a very wide margin. Its also a firm that routinely takes the best talent from Amazon, Apple, Porsche etc. Its the firm that introduced the public to self driving and electric cars (Tesla opened the door not GM or Ford in the way back) and its the firm that is putting pressure on the global automakers as the heads of the German automakers have frequently announced. And its the firm FCA and others say they are targeting. Its a firm whose products have set constant records for performance and safety. Its a firm that has done this without advertising. And its CEO is not just popular with CEO's but with the public with 23 million followers on Twitter. And its most important products long chided detractors as impossible to sustain and never to be profitable has not been claimed even by a Detroit critic to be highly profitable- yes the firm that made the sustainable electric car.

But public person and apparent consummate idiot Jim Chanos whenever his apparent short positions are challenged comes on CNBC and starts telling lies (for all we know he pays CNBC and others) At the very least the class of Tesla investors are harmed across the periods with a quantifiable impact in time money value over reduced liquidity on their stock positions. Also he his attempting to harm the companies good will in a way that damages investor value but in ways that would presumably benefit him financially. And he has apparently been caught doing this kind of stuff before and had to back off due to court involvement. Its not that he is providing information or doing whistle blowing (note recent attempts to construe sabotage as whistle blowing) what he is doing is more like getting paid for vandalism. That he is getting financial reward is not a justification but would appear more to be an aggravation. Wondering if any short gains he has recovered would be recoverable plus punitive damages. Wonder if he can be compelled to make retractions on pain of greater punitive liabilities- should he not set the record straight for good will for baseless claims that damage goodwill for ill gotten financial gain- of course its understood how problematic compelled speech is but maybe he'd want to avoid losing more or all of what he has? Should he not be made to disgorge?

Personally I tend to hate corporations and think they should be illegal- replace them with the open collaborative commons or something, but this I suspect with proper legal counsel Tesla Investors could come together as a class and go after. Any attorney willing to render an opinion?

 

[Pushmi-Pullyu]

...this I suspect with proper legal counsel Tesla Investors could come together as a class and go after.

Why would anyone want to spend money hiring an attorney over such a matter?

If you really think a high-profile Tesla basher like Chanos or Edward Niedermeyer has committed a crime related to stock manipulation -- and I can easily see an argument that they have -- then file a complaint with the SEC. Let the SEC investigate them; that's their job.

Filing a lawsuit against a single FUDster over this type of criminal activity would be absurd and probably a waste of money. It would be like trying to blame just one ant for ruining your picnic. It's not any individual ant -- or any one Tesla basher -- that's the problem; it's the entire community of Tesla bashers, and how they all support one another's FUD.

If TSLA investors wanted to band together to sue someone, then they should go after the people paying Chanos and Niedermeyer to write their FUD: The investment groups and/or the think tanks funded by Big Oil, which pay for EV bashing and Tesla bashing articles and fake studies. Going after one individual like Chanos would be like arresting the drug pusher on your street corner. If there is a drug dealer there, then arresting him isn't going to solve the problem. Another dealer would almost certainly take over the spot within a few weeks. Likewise, the financial groups and Big Oil think tanks can always find someone else to write their anti-EV or anti-Tesla propaganda.

The fundamental problem, the underlying problem, isn't the presence of the pusher; the problem is that there is a demand for illegal drugs, and a supply for that demand. Removing the middle-man won't end either the demand or the supply. And the real problem, the fundamental problem, isn't Chanos or Niedermeyer; it's the people paying them to write Tesla-bashing and EV-bashing lies and FUD.

 

[101101]

I agree with the general take. For instance its better to use a regulatory body and associated agency and the regulatory process. Whereas a court with jurisdiction over an agencies area will always render a binary decision often resulting in the double bind of justice for the litigants or justice for the constituency affected by the precedent. I get that. But sometime when you have lawyers pushing it you get a real investigation instead of political convenience and a shunting that goes no where. So a case presumes the agency will have to investigate as part of the proceedings and will brief the court in addition to the evidence presented by the law firms.

I share your concern. So maybe a case that names a lot of parties groups? I think Tesla has to protect itself. Its been doing a bit of that. But maybe the shareholders can help because they would have standing here as the injured party and because they are being damaged in ways that also harm the public and are presumably preventable without harming speech. I would think speech would be improved by cutting down on the malicious financially incentivized lies- these firms are profiting from intentionally miss-informing the public about matters of public interest.

Just today the morning headline was this new paid for idiot analyst said Tesla was worth less so per the paid for narrative the stock complied and is worth less on command trying to insist and condition the public that the value of the stock comes down to nothing but what these bought and paid for fools are paid to say its worth. And again the goal seems to be to lock a existentially important movement out of capital to create a capital veto through capital strike. Talk about collusion and they are blatant and self righteous about it.