It's been a rough stretch for investors. Not that the stock market is in a terrible slump — it's not. But while market indexes bounce around record highs, we're seeing new lows in reliable information that helps stockholders — and other stakeholders — make smart decisions.
First off, Tesla and CEO Elon Musk got a free pass on his blatant violation of an agreement with the Securities and Exchange Commission.
To recap: After Musk boasted falsely that he had "funding secured" to take Tesla private, he agreed to consult company lawyers to ensure he wouldn't tweet anything that was both significant — what investment types call "material" — and misleading.
Then the CEO tweeted that Tesla would make 500,000 vehicles this year — the top end of guidance — before clarifying that it would probably be 20 percent shy of that.
Musk's defense: Production plans are not material to shareholders. While that would seem absurd on the face of it, the SEC failed to convince a federal judge that such information is, in fact, fundamental to investors. Musk has said he has no respect for the SEC, and no wonder.
So instead of a conviction for contempt of court, the SEC got the electric vehicle maker to agree to a definition of the term "material," which, of course, includes production forecasts along with profit guidance, sales figures and merger plans.
Is this a unique case, in which the federal regulator is loathe to prosecute the man who is effectively the private developer of America's space program, or a general one, in which shareholders have no one defending their rights?
The thing is, it isn't just Musk — the great disrupter — redefining the status quo. Fiat Chrysler's decision to follow the lead of General Motors and Ford in reporting sales only quarterly instead of monthly is another setback for investors.
Automakers suggest there's little value in monthly reports because they lack perspective and nuance. But the companies themselves track sales very closely within each month as well as at its end. That's because the pace of sales is crucial to how the companies operate, including whether they need to adjust prices or idle plants.
We can't blame FCA for not wanting to share information that bigger rivals are now keeping secret. But we would sure like it if the owners — and business partners — of America's automakers weren't kept in the dark or flat-out lied to.
