In fact, I think a Tesla shareholder should be pretty happy with this settlement. The $20m fine at a time when Tesla is already running low of cash is certainly tough news, but every other part of this settlement is probably good news for the company's long term health. It is also obviously a lot better than some of the punishments people were talking about earlier this week.
The details will surely be disclosed.
It got harsher just after one day
However, it could go awry. If the independent board member were to try to combat Musk and get the company wrapped up in internal struggles, it could go badly for the company.
Hi there. More than 1/4 of my net worth, and over 1/2 of my equity holdings are in TSLA. I agree with every word of this. The $20M hurts, but on net, I think this is better for Tesla than if Elon had won the lawsuit.
Re-balancing your portfolio after things have started to go very, very well is certainly sound advice, and so is selling all your equity in a promising startup the moment it has significant market value (it will most likely still be worthless).
For me, it boils down to two things:
1. I'm pretty conservative with the rest of my money (index funds, rental property). If Tesla went bankrupt tomorrow, I'd be fine. Don't get me wrong -- it'd be a bad day. But the financial hit wouldn't threaten my long-term happiness.
2. I only buy individual stocks when I feel the market has wildly misjudged a company. Tesla fit this to a tee, particularly (but not exclusively) in the early days. I took a large early position and have been buying dips along the way (yes, still). By my judgment, a dollar invested in Tesla still has a much higher expected value over 10 years than a dollar invested in any other equity that I feel qualified to assess. I would love to diversify the highly aggressive part of my portfolio, but hard as I try, I cannot find a deal this good in any other public company. So I've decided how much I'm willing to lose on what I believe is a great bet, and have invested accordingly.
I didn't mean to make this about me or my investment strategy. I was just trying to back up the sentiment that the poster above me expressed -- that people with skin in the game will see this settlement as a great thing for Tesla. I have a lot of skin in the game and that's exactly how I feel.
No offense, but why???? It is crazy to have this much of your meet worth in ANY single company. I can only hope that you are independently wealthy and if TSLA went bankrupt (of which there is a very large possibility) that you'd be ok.
I think it's save to say that the relative amount of money lost is more important than the absolute money lost for most people
Under 35s median net worth is $4k
https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com...
This assumes of course that you've got the basics covered, like being out of debt and having some kind of emergency backup (savings, insurance, well-off parents, etc).
But it would have more or less have wiped out your upside. So if that's the insurance you would have liked for such a risky investment, it would have been better to just invest in something else.
For that to work, you'd need a particular sort of senior management arrangement, not just to leave him alone, but to take a lot of heat for his eccentricities. You need particular people capable of forming unusual understandings for that to work. And there would also necessarily end up being limits - there's only so far folks will cover someone else's bets.
The second reason is Musk's ego. I think he'd find a demotion humiliating, and if he's not treated as a Master of the Universe Superhero-CEO, I bet even money he'd behave worse, pick fights with his minders, etc.
Yeah. Of course he wears his ego proudly. You don't rise to that level without above average chutzpah. But I think that's more a side show than the featured event.
You can draw a very short dotted line to all the automation they eventually had to rip out of the Model 3 production line.
On the plus side he's a visionary with a lot of cash. The downside is that his ego wont let him take advice from people he doesn't agree with.
The latter character flaw is a recipe for disaster if left unchecked over the long term. This move is good for Tesla.
Elon Musk should not have said what he did, but advocating for sodomy is not critique. Some cultures have the death penalty for sodomy whereas the acceptance of critique is celebrated as wise in most cultures. The character flaw of the news is that in cases like this, it does not seek to create a peaceful resolution between the two parties, but instead blows up their differences as much as possible. Both of these men tried to save the lives of kids.
I agree that Twitter censure is likely to be of benefit to Tesla. Starving the news of Elon Musk content is a good thing. It will hurt the profits of attention-derived news. Plus, the doom of the ICE industry is rearing its head. So they can talk breathlessly about that and criticize the existing auto manufacturers for not seeing the writing on the wall once they figure out a new strategy to maximize their attention derived profits. I'm cynical enough that I figure this story shift will probably happen around the time that Tesla starts taking out television ads.
What Elon did:
> Elon Musk has escalated his baseless attacks against a British diver, claiming without evidence that the man who helped rescue children from a cave in Thailand was a “child rapist” in an email to a reporter. [https://www.theguardian.com/technology/2018/sep/04/elon-musk...]
Makes for a great story though. Much outrage. The madder you are, the more irrational you have become? The better. Many clicks. Much profit. Much circus. Totally get why the reporter violated the principle of off the record conversations in order to earn themselves money and create drama. People make money, because you just linked this article. That is how this works. This is how social media generated news tends to make its money. If the story didn't outrage you enough for you to share that link with me? They failed.
But don't let them delude you into thinking its in the best interest of either party being reported on to be known for their worst moments. Nor for the public opinion of both people to be shaped by these moments. Both of these people tried to save the lives of children. The character of both people are very likely to be somewhat congruent with that. I presume innocence until shown otherwise with regard to the accusations leveled. It isn't a story of interest to me without evidence which backs it. I refuse to join either mob.
(Which, by the way, is something that is generally A-okay - "sodomy" refers to gay (usually anal) sex, and Western societies have generally decided that's not a crime anymore.)
>Some cultures have the death penalty for sodomy whereas the acceptance of critique is celebrated as wise in most cultures
Anyway, he actually said Elon Musk to "stick the submarine where it hurts" and called it a PR stunt. Elon then responds with this tweet, which I think is relatively appropriate:
https://twitter.com/elonmusk/status/1016960469737693184
Elon then also made this statement:
https://twitter.com/GossiTheDog/status/1018513062855364608
And a series of other tweets doubling down on the sentiment. This is insane and depraved. You can argue that this is all inflamed by the media, outrage culture , etc, but at the end of the day, the CEO of a hugely popular tech company took to twitter (where he has 23m followers) to spread vile and baseless accusations about someone.
He made these tweets originally and publicly in JULY. It was only recently (and after apologizing) that he REPEATED the accusations to Buzzfeed news. And the buzzfeed reporter also preempts your accusations that the emails were leaked improperly ("He prefaced the email with "off the record" though I did not agree to that condition. Off the record is a two-party agreement.")
> Both of these people tried to save the lives of children
Yah, sure. But one of them also took to their social media and their millions of followers to accuse the other of being a pedophile, and then repeated the accusation, and then apologized, and then REPEATED the accusation again months later. With no proof. And so Musk can both be someone who tried to save the lives of children and a piece of garbage who is prone to emotional outbursts that can do real damage to real people.
Yeah, bad way to make my point. I know that there is very clear adversarial search for and an adversarial amplification and adversarial provocation of all Elon Musk's flaws. This amplification involves a game of telephone in which their is mounting outrage which turns 'shove it where it hurts' into 'dared to critique the proposed engineering solution'. I'm trying to introduce reality again in the hope of stopping the mob mentality death threats toward Unsworth and the harming of the mission of electrification of transport. People are intentionally trying to help feed this system, to see what happens [1]. I've seen enough of what happens to know this is a bad idea.
Pretty sure the right thing to do is let the conversation die. Due process will bring much more justice than social media amplification.
[1]: https://twitter.com/TeslaCharts/status/1008405211432570880
The guy is now suing Musk, which really is (in my opinion) his only choice, as otherwise many people might assume the accusation is true (as Musk is so sure, and even asked why he wasn't being sued as a response)
> The guy is now suing Musk, which really is (in my opinion) his only choice, as otherwise many people might assume the accusation is true (as Musk is so sure, and even asked why he wasn't being sued as a response)
I agree.
Given his large-scale visions, I suspect the attempt at extreme automation was intended as a proof of concept about fully automated manufacturing for off-planet use.
Knowing that, it would explain his tendency to make sudden pronouncements and try to stay at the office/factory at all hours.
The combination of removing Musk as Chairman and adding two independent directors means there's a slim chance that he could eventually be fired – more likely, it means that Musk will be held more accountable to the board.
There are specific jobs that board members and officers have. Just having 'the most shares' often isn't enough to do everything you want.
Moreover, he only owns 20% of the company.
Being 'busted down' is a huge political blow, he would be seen as weak, it would be hard for him to do his job.
He could resign as Chairman and save face, and then say 'Ima do Engineering full time' or something but it'd be hard for him to go as CEO.
There's nothing only about owning 20% of a public company.
20% and the largest shareholder, is more than enough to turn any public company inside out. Hedge funds do it all the time with dramatically weaker positions of single digit ownership. Carl Icahn routinely does it with a few percent. It's an immense position in the public markets in terms of wielding power.
'Hedge Funds' do this by forming a cabal with other funds and institutional investors.
This is totally unlike Alphabet or Facebook etc. where there is real and direct power.
I don't doubt is shareholders really wanted him gone they could punt Musk.
EDIT: largely. In a company like Tesla, with such a strong CEO, the Chairman would be a symbolic role. In a very large and sprawling company (PepsiCo?), it wouldn't be so symbolic.
In a company like Tesla, that has been sanctioned by the SEC for failing to adequately control the public actions of the still-current CEO, it's unlikely that the Chairman would be a symbolic role.
Edit: use Musk’s name.
You'd get into even more trouble with the SEC if you ran a public company where the executives and officers are not what you claim they are but are stand-ins for someone else.
Meanwhile, wouldn't it be completely normal and legitimate for a company to give the VP of Engineering or Operations a free hand in making engineering or operations decisions?
You are right. In most public companies, it would matter greatly since the chairman is the most powerful person in the company ( CEO reports to the chairman ). But as you noted, musk is the largest shareholder, but more importantly other large shareholders ( especially the institutional shareholders ) back him. So he would be in charge regardless. But removing him from the chairman is optically damaging, so it's not insignificant. It matters, but not as much as it would normally.
Elon's chairman will be under scrutiny by the SEC to keep an eye on Elon from the inside.