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Mt Gox CEO to Receive Sentence on Friday

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On Friday, Chief Executive Officer (CEO) of Mt. Gox, will face the trial of his lifetime. Prosecutors of a Japanese court have demanded the CEO, Mark Kapelès, be sentenced to 10 years in prison under charges of embezzlement and fraud.

This is not the first time, such a request has been put forward by the prosecutors. To provide a little context to this case: Mt. Gox exchange filed for bankruptcy in 2014, when its security was breached and millions of dollars worth Bitcoins were lost sometime in 2011-12.  As earlier reported by Crypto-News India, at the time, the exchange still had a lot of funds which were seized by the government and is controlled by a trustee now. This trustee is responsible for overseeing redistribution of assets to creditors.

Earlier, in a Reddit post, Kerpeles had also revealed that he was not interested in the $1 Billion worth Bitcoins that he was entitled to. He had said, “I did my best trying to grow the ecosystem by running the biggest exchange at the time. It had big problems but still managed to hang in there. For a while. A quite long while, even, while the rest of the ecosystem caught up. At the end of the day, the methods I chose to try to get MtGox out of its trouble ended up being insufficient, insufficiently executed, or plain wrong.”

He had said, “I know I didn’t handle the last, stressful days of the outdrawn and painful Gox collapse very well. I can only be humble about that in hindsight. Once again, I’m sorry.”

The Mt. Gox CEO has pleaded his innocence several times over and asked “to be forgiven.” The other charges that have been slapped on the former CEO include,  spending client funds on prostitutes, overseas trips, utility bills, and an extravagant bed.

While the fate may be decided by coming Friday, it has been stated that the exchange may not start its operations again.

Source . crypto-news.in

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Elon Musk is 100% Right. 3 Reasons Tesla Must Go Private…Or it’s Doomed

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Wednesday’s earnings report was a bust for Tesla. The company reported a huge loss of $702 million and missed revenue expectations.

In the conference call that followed, forlorn Tesla boss Elon Musk mused about taking Tesla private again:

“I would prefer we were private, but unfortunately I think the ship, that ship, has sailed.”

Elon Musk desperately wants to pull Tesla off the stock market and return it to private investors. And he’s right. Going private is exactly what Tesla needs right now to avoid a death spiral. 

“TAKING TESLA PRIVATE… FUNDING SECURED”

Musk first hinted about his ambition to take Tesla private in August 2018. In a now infamous tweet, he said “Am thinking about taking Tesla private at $420. Funding secured.”

The tweet landed him in hot water with the Securities and Exchange Commission (SEC). The Commission accused Musk of fraud, claiming the “funding secured” tweet was “false and misleading.”

3 REASONS TESLA SHOULD BE A PRIVATE COMPANY

Although Musk is resigned to keeping Tesla public, it’s the wrong decision for three reasons:

  1. Tesla is forced to perform to an arbitrary quarterly earnings cycle rather than focusing on long-term ambition.
  2. Tesla is open to short-sellers which ravage Tesla and its stock (and Musk can’t stop baiting them).
  3. Tesla still operates like a startup. It needs time to experiment and mature.

Let’s go through them one at a time.

1. TESLA SHOULD FOCUS LONG-TERM, NOT QUARTERLY REPORTS

Being public means delivering knock-out performances every single quarter. But a company like Tesla should be looking five years in the future.

Listening to Wednesday’s earnings call, you could sense this conflict in Musk’s delivery:

“If we were to fully optimize for profitability in Q2, I think we could do it, but then we would be unable to unwind this crazy wave of deliveries.”

Rather than focusing on Tesla’s long-term strategy, Musk is being forced to think about how to appease investors in the next three months.

Going private would allow Tesla to ditch the quarterly pressures and get back its ambitious roots. Elon Musk himself admitted:

“Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term.”

2. SHORT-SELLERS RAVAGE TESLA ON PUBLIC MARKETS

Tesla is notoriously one of the most shorted stocks on the market. There is an entire community on Twitter dedicated to betting against Tesla, known as $TESLAQ.

The sheer volume of shorts means there’s an incentive to find and spread negative angles on Tesla for financial gain. As one analyst explains:

“[Short sellers] puts downward pressure on the stock, and that’s not good, when your daily report card is the stock price.”

More importantly, Elon Musk gets massively distracted by short-sellers. He constantly baits them and interacts with them. 

The constant obsession with short-sellers and stock price volatility is pulling Elon Musk’s attention in all the wrong directions.

3. TESLA STILL OPERATES LIKE A STARTUP

Companies typically go public when they are sufficiently grown, stable, and somewhat predictable.

While Tesla is a large, well-capitalized company, it still operates like a startup. Its forecasts are volatile and unpredictable. Tesla constantly shifts focus and explores new directions in a mission to define the future of driving.

Going public means there’s less freedom to experiment which is Tesla’s modus operandi. 

Ultimately, Tesla should go private while it hones and defines the company. And as Elon Musk said, the company could return to the public markets at a later date:

“In the future, once Tesla enters a phase of slower, more predictable growth, it will likely make sense to return to the public markets.”

Source.ccn

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Wall Street Bashes Elon Musk’s ‘Twilight Zone Act’ in Tesla’s Meltdown

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By CCN: Everyone is running out of patience with Elon Musk and his antics as the CEO of Tesla. Following the company’s spectacularly disappointing earnings report, Goldman Sachs and Wedbush downgraded Tesla’s stock on Thursday.

The downgrades weren’t a surprise given the dismal numbers Tesla reported. However, the scathing lashing given out by the Wedbush analyst did take some aback.

THE RESEARCH NOTE THAT COULD MAKE HISTORY

Clearly frustrated with Musk, Wedbush analyst Daniel Ives’ note to investors was part venting, mostly true, and should be a scream to Musk to get it together.

“In our 20 years of covering tech stocks on the Street we view this quarter as one of top debacles we have ever seen while Musk & Co. in an episode out of the Twilight Zone act as if demand and profitability will magically return to the Tesla story.”

The analyst went on to describe a “demand story at Tesla” that is evolving. Unfortunately, the company has not been able to adjust.

“We no longer can look investors in the eye and recommend buying this stock at current levels until Tesla starts to take its medicine and focus on reality around demand issues which is the core focus of investors.”

With that said, the firm lowered its rating to neutral from outperform. It smashed the price target to $275 from $365. While it had been comfortable with its price targets, this last quarter was too much.

TESLA’S FUNNY MATH

Goldman Sachs cut its price target to $200 from $210. It maintained its sell rating.

In its note, Goldman Sachs analyst David Tamberrino raised concerns about the Tesla’s guidance numbers.

“Ultimately, we believe the company’s ‘if we build it, they will come’ mantra likely requires incremental incentives (or some form of this) in order to entice incremental sales – which also will weigh on gross margins.”

Tesla stock

Tesla’s stock has shed 19% year-to-date. | Source: Yahoo Finance

WORST QUARTER EVER

Tesla reported a loss of $702 million in the quarter. Its loss per share was $2.90, which was far more than the $0.69 analysts had expected.

 

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QuadrigaCX CEO’s Was Afraid of Being Kidnapped, May Have Set Up ‘Dead Mans Switch’

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QuadrigaCX CEO Apparently Feated For His Life Former Colleague Says

The QuadrigaCX controversy seems not to have an end. This time, a former colleague and friends, said that the CEO of the platform, Gerald Cotten, feared for his life due to the large number of funds he exclusively controlled. The information was released by Global News on April 19.

QuadrigaCX CEO Feared For His Life

As per the colleague, Cotten mused to him about being kidnapped due to the large fortune controlled. Adam O’Brien explained that it was difficult to know how seriously Cotten’s references were. O’Brien is the owner of a cryptocurrency business.

On the matter, O’Brien commented:

“Gerry was holding, we know, over $100 million, almost $200 million dollars in funds. That makes people do some pretty crazy things. And I think Gerry was aware of that, and I think he was kind of worried that something might happen.”

At the moment, the funds that people held in the QuadrigaCX exchange are locked and cannot be recovered. Mr. Cotten, who passed away back in December 2018, was the only person that knew the private keys of the wallets where the funds were stored.

O’Brien mentioned that he was shocked about Cotten’s death and that he doesn’t believe in conspiracy theories that suggest that Mr. Cotten faked his death. At the same time, he mentioned that he does not believe that customers will recover their funds.

As O’Brien explains, it will be good for Bitcoin and the industry to have one leg up in a dead man’s switch. A dead man’s switch would allow the funds to be moved to another address if the users do not enter their wallets for a specified amount of time. At the same time, the switch activates by itself and it sends the encryption codes to someone that the user designates before.

At the moment, there is an ongoing investigation related to the funds lost by QuadrigaCX. Nonetheless, there is no information about the funds lost.

Source:bitcoinexchangeguide

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