If you are to believe the media, Elon Musk has become “unhinged” and is losing his mind.  Less than a week after settling with the SEC, yesterday he called the SEC the “Shortseller Enrichment Committee”, https://twitter.com/elonmusk/status/1047943670350020608.  The result, the stock tanked $20 on Friday and closed at $261.95, even lower than before Elon’s settlement with the SEC.

I’ve been an ardent fan and supporter of Elon for over 6 years.  In fact so much so that I’ve written thousands of posts on TMC (teslamotorsclub.com).  And like most other TSLA shareholders, I’m upset about the stock price and I’m not happy about Elon’s tweets.

However, I look at things differently than most.

First, Elon is doing just fine.  He is as capable as ever.  And all the things he’s tweeted, he’s done so because he’s believed them and thought they were right.  In fact, if it were up to Elon, I think he would fight the SEC’s case against him.  But it would be such a long and drawn-out distraction to everyone, Elon was forced to settle.

I think the bigger problem at hand is that some of Elon’s tweets have turned people ardently against him, to the point where people (and not just shortsellers) are working against him.

The worst of Elon’s tweets have been calling diver Vernon Unsworth a “pedo”, apologizing sort of, and then calling him a “pedo” again.

I don’t think Elon is aware how damaging this was to the trust and faith people have extended to Elon over the years.

I know many people, who’ve been ardent fans of Elon over the years, who were deeply disappointed in Elon’s accusations of Vernon Unsworth.

For me though, I understand that Elon has somewhat a troubled family history that can sometimes act as a trigger of sorts.  You can look up the exact words but Elon has said that his father is “evil”, a “terrible human being,” and had done evil things beyond imagination.  I’m assuming he’s referring to Elon’s father having a baby with his stepdaughter, but there could be more. 

In other words, Elon is really, really bothered by pedophiles.  Now, most people are bothered as well.  But for Elon is goes to a whole another level.

When Elon was criticized by Vernon Unsworth, my speculation is that some of Elon’s circle sent him some info that linked Vernon to the child sex industry.  One speculation could have been that there was a photo of Vernon with some young Thai girls on a bed.  However, we don’t have proof since no evidence was shared by Elon to the public.

However, for Elon, whatever was shown or explained to him was enough for him to believe that there’s a high likelihood that Vernon Unsworth was a pedophile.  So for Elon to accuse him was something that Elon views as just and right.  In other words, if Vernon wasn’t a pedophile then that would come out, but if he was a pedophile then that would come out.  And Elon was betting that he was a pedophile.

What Elon should have done was if he had evidence that Vernon was a pedophile, then he should have shared that evidence with the public.  He could have “leaked” the evidence to the media.  Or Elon could have hired a private investigator to gather the evidence.

However, as it stands there hasn’t been any clear evidence that Vernon is a pedophile, so Elon’s accusations (that he still hasn’t retracted) seem baseless and an abuse of power.  Meaning, Elon is a billionaire and it doesn’t matter if Vernon sues Elon for libel, since it wouldn’t be a very significant amount of money for Elon.  I think Elon is betting that in the trial process, evidence will come out that Vernon is a pedophile indeed.  However, this is a risky bet albeit one that Elon is probably comfortable taking.  The reason it’s risky is because it is being seen as an abuse of power by someone with lots of money.  In other words, someone rich is accusing someone of a crime that he has no evidence for.  And as result, the reputation of that person if forever damaged.  And the rich person is not held accountable.  This is very unjust in the eyes of many people.

This “injustice” has sparked a lot of anger and disappointment in many people against Elon Musk.  And the media also has played a role in spreading that anger and disappointment.  But the seed is the accusations without presentable evidence that Elon has made, and has decided to double-down by not retracting.

Thus, opposing Elon has now become a moral issue… something a growing number of people feel like they need to do to protect justice and reign in an abusive billionaire.  This is very sad, because it’s not Elon’s intention to be unjust or to spread baseless accusations.  Elon probably has some reason to believe what he believes about Vernon, but the evidence might not be 100% clear but he’s betting that there is evidence out there.  In Elon’s view, he’s doing the right thing and standing against pedophilia and immorality.  But for others, it’s the opposite… Elon is being abusive in his power and must be stopped.

To understand the SEC’s actions against Elon, one must understand what I’ve shared about Elon vs Vernon.  Because that’s the background and the context for the SEC case.  In other words, the SEC case isn’t necessarily just about the “funding secured” tweet by Elon.  Rather, the bigger issue is the SEC trying to reign in an “unhinged” billionaire CEO that is causing havoc and damage to lots of people.

Steve Bannon several weeks ago was quoted Elon “lies” and Tesla is “out of control”.  He wanted Elon reigned in.  Elon brushed off Bannon’s words.  But that sentiment that Bannon expressed has spread to some very, very high places.  And that sentiment has been growing.

It’s sentiment that looks at Elon as “out of control” and with “no accountability”.  A person “above the law” and as someone who “needs to be stopped.”  There have been actually more than just the Elon “pedo” tweets to contribute to this sentiment, but the “pedo” tweets nonetheless, I think, are the most important and most influential in spurring and encouraging this sentiment to oppose Elon.

Elon probably feels that the SEC is overboard in it’s accusations and demands because he feels like his “funding secured” tweet wasn’t wrong.  He knows that he thought that funding was secured, so it was honest and forthright.  However, the SEC is playing a different game.  They’re going after Elon because of “funding secured” because they think they have legal grounds to make a strong case.  But what the SEC really is after is to “control an out-of-control and wild CEO” who’s made many mistakes over Twitter and the SEC wants it to stop.  That’s why the SEC has demanded Elon to step down as Chairman and for Tesla to add more independent board members.  And it’s also why the SEC will play hardball if Elon chooses to fight back.  It’s because the SEC is dead-on focused, at least in their minds, to keep people “safe” from this “dangerous” CEO.

Elon needs to take a step back and realize that the problem really isn’t the SEC, even though the SEC is fighting dirty and I don’t agree with the approach.  The SEC is just trying to solve a problem, and they’re doing it the best way they know how, even if it’s overboard.

In Part 2 and 3, I’ll go into some further ideas regarding what’s going on with Elon, Tesla and the relentless attacks against them.  And most importantly, I’ll share some suggestions on how all this can be fixed.