here to the precedence of this court and secondarily whether they must apply the standard that the supreme court and this court have that preval you waiting motion to dismiss as a matter of and seventeen representation that the quote machine that makes the machine was producing automobiles when in fact they were still being done by hand  so your honor this comes to this gets to how the district court drew inferences in the case the record in this case is replete with instances where the defendants discussed a plan and a schedule and the timing for reaching benchmarks and the machine that makes the machine is one of those benchmark the company explain the phrase machine that makes the machine but in the context that this court ruled it doesn't need to sell a verse is web context is the assembly line is the machine that makes the machine and the counter the counter inference is that production meant production by hand and there is simply nothing in the record that's where  that there's no definition of well so so do you want to be asked a question i would say all those investors no one raises the question of what you really mean there was never discussed and so now we have to decide what what could possibly be the meaning of this i am frank to admit and i can be talked out of this but after i read judge writer's opinion it was pretty persuasive to course he's a very good district judge bryer found that we had not pleaded that defendants ever expressed a plan that tesla never said this is what our plan is that that this is forward looking because essentially every model three is based on many assumptions the st of which is complete building any being a new dedicated final assembly line the goal judge collins is certainly forward looking we we would like to build and to we quit this to completion so that we can start production but you'll recall that was false and misleading about may is and there is no dispute that we have treated this with requisite particularity that we may judge problems they had not yet they're installing the equipment freemont facility we started that are in early february and they in fact had not started that we plead with requisite particularity until late april or early may careful i'd like to secure my colleagues permission to switch gears a little bit to another issue that's a concern to me even assuming that some or all of those statements are other which you discussed last confirmation which seems tenuous to me just looking to have the allegations without knowing the your concern your honor at the time of the the partial disclosure in october that signals were not as peplum had described the stock price fell again in november it if went off and then it went down and it's it's to me it's unclear as to whether it's related to these disclosures are related to other market conditions are related to earnings projections or meet you say that it's related to their failure to disclose the facts but why and why is that sufficiently plausible in the context of non dramatic drop that also there seems to be an evident flow in the stock price at least as i understand it but but the ebb and flow is not explained away by the drop on the date of the disclosure to honor and even as the p s l r a requires a more precise reading for law causation in this case there is no intervening cause on the dates of disclosure there's nothing of record which would cause the court at the pleading stage to determine as a matter of law that the complaint fails to proceed last causing the required them to spend enormous sums of cash which might have required them to go back to the market and seek more that's a tremendous risk so when they disclosed when the wall street journal disclosed in october that they were in one automotive expert said was a horse and carriage production when they disclosed that the stock price fell because the risk increased that they would fail to reach the goal then in november when they themselves conceded that it would not reach the goal the stock price fell again mr chris and descendants will have the opportunity at class certification and a trial to prove a that there was no price impact and b that there was some supervening or intervening cause that severs the relationship between the disclosure but that's the pleading stage the judge raper that's not a dis if i may just quickly return to the st quarter judge call and they say here's our production plan that we have to complete and build and your correct judge collins that is in itself forward looking but what they failed to disclose in in they is that they had not yet done installing which is installation takes four to five months four to five months from a which puts them into october to begin the production ramp and if they don't begin the production ramp in october by their own schedule judge paul and they will fail to reach mass production by the end of tw and here's our timing but now gone from that after the descendants had said here's the machine that makes the machine we've completed it and now we're producing gone from that judge collins is is we're building and we're equipped and the facility replaced by the key assumption being we will be able to complete implementing and ramping our new final dedicated assembly line so they've tr rified what you correctly identified as forward looking in may to something that they had completed and in the up and in the conference call they do nothing to disabuse the market of the fact they had said point because what goes from being a forward looking statement that may becomes something that they speak with certainty the machine that makes the machine is finished and therefore we have production and the complaints means with requisite particularity that the judge part of the complaint pleads with requisite particularity that in fact they did not make any cars on the machine that makes the machine at outset that to provide a little context by briefly covering the timeline as i think it really helps frame the issues school work in shows why judge bryer got this exactly right so just to get this straight in and you know what it says during quarter two our engineering manufacturing and supply chain teams were focused on the final stages of model three products development and building vendor shale let makes the machine for those st of production and then three paragraphs down it says having started production model to be on schedule in july is a new problem is capable inference of those two sentences that the machine that makes the the start of production in july no not at all your honor and in let me address that and in some level of details but let me start with one really basic point so they're arguing that judge bryer committed reversible error based on allegations it did not make and an argument it did not make thirty two motions to dismiss at the just record level that's a little too little too late but there's importantly even if they had there's a reason why they didn't refer to that statement because they're really taking it completely out of context the final stages reference at page one  six in the record a fine book the stages reference is to product development what we're saying is we're just finishing developing the product and it says the teams are focused on building the machine that makes the machine for the start of production now of course they were focused in part of building the machine that makes the machine for the start of production that's what everybody would expect them to do but you can't read you have to read the sentences and all the disclosures and context you can't read that to mean that all manufacturing automation was already in place especially because at the very same time tesla said it still needs to quote complete the implementation complete the implementation in ramp of automated manufacturing equipment and processes it still needed to add production lines and capacity in order to meet its goals it said it was still working on it and indeed  automated at that time it's simply inconsistent with tesla's contemporaneous disclosures which were briefed extensively twice before judge prior and in the district court as well as they don't address those disclosures a single time that's pretty telling because that's the context in which they should be read now mr goldberg also made the assertion you know that they still don't the problem i still have if it is that they were working on building the machine that goes the machine for the start of production and then you say and we started production any reasonable investor who looks at that would think that that means that the machine that makes the machine had been completed d doesn't necessarily mean there aren't other things to be done but that had been done at some level which appears from what they pleaded to have been there was no machine to make sure they were there were making anything at an automated level well but that's not true either your honor if you look at for example the may shareholder vote or the may shareholder letter describes processes that are automated that were already in place a talks about the schuler press line the paint shop for example and that's in the record as c e o our one ford what tesla had regularly talked about the machine that makes the machine to refer to its overall processes so some were in place but when you read the other disclosure which the plaintiff would be writing out of existence saying we still have to implement and ramp additional manufacturing additional automated manufacturing to make our year end goal those statements become meaningless if the allegation is interpreted that way and that's the fundamental problem that the plaintiff asked i would have your honor that you know the plaintiff sometimes argues that the market understood this to be the way tesla's time line but when you look at the only analyst reports for example that they cite in this case boom none of them talk about this eleven month plan or say automated production would  begin in july to the contrary they say that tesla didn't reveal any new data points and they never make reference to this eleven month plan but let me take it back to what the statements are that the plaintiff is claiming or misleading here because the allegation is in the case isn't about that statement which isn't even referenced in their complaint was called the statements that they are referencing as being on false it may their statements that say that preparations at our production facilities are on track to support the ramp of lot of three production to five thousand dollars by a year and that's the alleged misstatement and as to that statement q and that statement simply was the tesla had started the installation model three manufacturing but that's all it set didn't say anything about automation didn't say when it would be done didn't say anything at all it doesn't have this array of benchmarks that the plaintiff alleges and that's why judge bryer looked at the statement looked at the context in which it was made and he said it was entirely specious this plan doesn't exist it's what quality systems was concerned about was a defendant's effort to transform a present state statement into a corner or the king won by combining it with the projection and so in that case for example it plane that defended saying here is the state of my pipeline my pipeline is good and if that makes sometimes it so that independently sometimes it combined with the projection and what the court said was well now you've got three high level people who say that was false at the time and you can't protect that portion that talked about your existing hype line into a forward looking statement just by combining that way but in doing that quality r case that as the statements our preparations are on track to support the ramp to five thousand the track is to support the ramp to five thousand that has no independent meaning independent of the projected goal and that's why both courts before quality system and since quality systems and we cite an array of them in our in our briefs they say no those are forward looking now there can be circumstances where there are not th cases are a little bit divided but i think it's really a case by case basis judge wallace in a long answer your question i don't know that there's an easy way to pronounce a a rule that says on track is always a mixed or we said we were installing equipment again the statement being we have started the installation model kernan factual victim plan of has no witness no document no anything that says that that is absolutely true and indeed the only witness that it cites that even talks about automated that put aside any equipment is an effort to set forward number seven and that's what they hang much of their hat on in this case and the problem with efi seven is that he's not much of an eyewitness he was a a temporary employee who was employed in fremont before production even began he was there from february until june he worked on the pilot shop in fremont he doesn't know what was happening at the gigafactory he doesn't know what was happening at the main factory in fremont and he doesn't purport to know the plan but one thing he does  t and it goes to the assertion that no equipment is being installed as he said even automated equipment was being installed in april so obviously there was some acquitted being installed before that as well so the notion that causation and i don't think you have to necessarily reach a lost cause ation in order to farm because of the fault but it's really is lacking there that the plaintiff alleged three corrective disclosure one follow that october to release that i referenced where we announced the bottom that's of the kind of abandon that plan because the price went up after that disclosure now down there next allegation concerning this october th wall street journal story and putting aside for a minute that it too conflates automated production with production the most fundamental problem is that the stock price decline for just a day then bounce back to the same or even higher levels so it can hardly be said to have revealed some fundamental flaw fraud at tesla when the stock price goes back up and that's what happened in the metzler case where the th circuit said hey if the preparedness our goal our projection of mass production by years and remain and that was simply not true because the machine that makes the machine the building on the gripping was not done and wasn't done until october we never pleaded just as mr christie says that all systems must be automated but the machine that makes the machine is an assembly line maybe different things but it was not even close when they said the machine that makes the machine is completed and building and equipping their own schedule this is their schedule it's in the form of tents you goes from being forward looking building in equipping to having finished building and putting in august they were not produced in the car they were making it by hand and each of the investors you look at them a nd the rd conference call that your par in that call the investors know that tesla to make the car by hand without the machine that makes the machine the question is when they're going to be able to ramp to mass production so that their passion burns stops that's what's critical here now while if we are confident that we will make our projection because our pipeline is good that's quality system here they say we are confident we will mass produce because of our preparedness there's no daylight between those two statements and therefore their statements on track or otherwise in this context are absolutely not forward looking even as the goal