I think being a public company is good for many reasons, amongst other: the public can participate in the success of companies and for the company it provides a great reality gauge. Maybe that’s what he’s afraid of...
The idea that companies should have the goal of going public is deeply flawed/unhealthy, I think. Though it makes sense for some.
That's entirely the company's decision. If they want to focus on long-term growth at the expense of profit (i.e. Amazon), they can.
Musk claims people will still be able to invest in Tesla and hold shares, but I'm heavily skeptical. I'm Canadian, and many US financial companies do not deal with foreigners. There is also no way for me, currently, to invest in SpaceX. That opportunity is reserved to the ultra rich. As a Tesla investor, this is a real blow. As someone who grew up poor and only became "middle class" after years of hard work, I feel like I've been spit in the face.
A grim outlook, to be sure. But look at the flipside: emperors of old could only dream of the luxuries we enjoy on a daily basis. We can eat peaches in winter!
> I would like to structure this so that all shareholders have a choice. Either they can stay investors in a private Tesla or they can be bought out at $420 per share[...] My hope is for all shareholders to remain
There is also the possibility that your broker won't do the necessary paperwork and will just liquidate your position, or require you to move your shares to a legal entity that can assist you. Granted, they probably wouldn't do this without notifying you. And if you're a non-US person, there are probably issues regarding transfer of shares, potential tax realization and so on. Not to mention the requirement to be an accredited investor, which I'm not sure how Tesla will skirt. There are a lot of open details here.
I can see that my initial comment could be misinterpreted, but my point was that "You will be able to continue to hold" is not quite the complete picture.
I know you think you know Tesla's prospects better than the market but this could also be a good, if not life-changing, exit at the high point.
I believe he also said he only took Tesla public because he had no choice, not because it was his goal.
Public companies have pressure to perform every quarter, rather than focus on the long term goal. General Motors stopped reporting quarterly car sales (or monthly?) because it's a distraction. GM's focus, is actually electric vehicles and self driving cars.
Per Musk's announcement, once Tesla is stable, and producing at a constant rate with predictable growth...like Amazon like Berkshire Hathaway, like Starbucks, then he will consider making Tesla public again.
Interesting note...Tesla is worth more than GM.
Cynically, I think it is hard to reconcile the Elon Musk who says "our stock price is a distraction" that we need to not consider it moving forward, and the Elon Musk who has borrowed against 40% of his stock in the company and whose pay package is entirely based in stock. This move prevents him personally from facing many possible downside risks, and it is hard to take his statements at face value.
> Public companies have pressure to perform every quarter, rather than focus on the long term goal. General Motors stopped reporting quarterly car sales (or monthly?) because it's a distraction. GM's focus, is actually electric vehicles and self driving cars.
General Motors stopped reporting monthly sales numbers in April, citing that monthly numbers are too volatile to gain meaningful insight from. That strikes me closer to a decision meant to provide greater transparency than one of Tesla's sort.
> Per Musk's announcement, once Tesla is stable, and producing at a constant rate with predictable growth...like Amazon like Berkshire Hathaway, like Starbucks, then he will consider making Tesla public again.
None of those are anywhere close to the predictable business you seem to think they are.
Berkshire especially. Prior to 2017, Berkshire consistently posted extremely up and down earnings due to its huge positions in the re-insurance business. Since 2017, it has posted even more volatile earnings because its public stock positions were required to be marked to market instead of at book value. And you know what? Wall Street hasn't cared about the quarterly choppiness of the Omaha company.
My point here is that Wall Street cares about quarterly financials... for some companies. If Elon had one that had proven himself capable of meeting his own goals or generating cash, he would be in that category. But instead he has a company with $10 billion in debt, only been cash flow positive for two quarters, and never come close to meeting its own stated estimates. It's kind of hard for his debt and equity holders to not start eventually asking "where's the beef?"
Spotify, Twilio, Salesforce, Box, Adobe, Workday, Atlassian, Intuit, ADP, to name a few.
The owner gets more control - both on the company, it's long term vision, it's investors and the future of the company.
It's a win for all.
What advantage does being public get you?
It gets you $ at a massive cost - both regulatory and quarterly.
Apple is owned by countless pension funds, endowments, likely every politician who invests, and a large % of the general population.
Their success is also part success for all those people. Private companies have far fewer defenders, much easier to vilify and punish.
The return to some sort of 19th century capitalism dominated by private industry magnates has been going on for a while.