Elon Musk’s Ultimatum to Tesla: Fight the S.E.C., or I Quit | Hacker News Reader

Elon Musk’s Ultimatum to Tesla: Fight the S.E.C., or I Quit

nytimes.com

161 pointsprawn150 comments

These articles about Elon are interesting to me because Tesla could not have become such a valuable car company in such a short time if it wasn't for Elon, and that includes his personality.

Yet, many couch investors would prefer to have a CEO who is stable, boring and predictable. People want to put their money in for steady long-term returns, and not worry. Tesla is doing wild things which are causing crazy growth, but also crazy panic.

It seems the market really wants Tesla to slow down so they can sell more stock to an average risk-averse consumer, but Elon wants to keep running light-speed, regardless of the short-term worry that it might create. Neither is wrong, they just have different priorities.

There is no shortage of boring automotive companies to invest in if that's what they want.

Invest in Musk if you believe the future won't happen fast enough if you don't. A corporate board making all the decisions would have been long ago crushed by big oil or bigger manufacturers, or their patents bought and buried to continue the status-quo.

how is tesla the future? they are still figuring out how to reliably manufacture a very small number of stagnant models, whereas every other car manufacturer iterates on multiple models every year, and it all works like clockwork and yields very reliable and safe cars. my kia optima sxl is much less than 50% of a tesla and yet has a higher fit and finish and is more safe.

but manufacturing entirely new type of car? somebody gotta take the hit of being the first (most of the time, failing) one to try to do it on this scale. It's the only way forward. I think old and steady auto manufacturers are too stagnant to ever try their hand at such a risky but needed move.

Is it really so? They are not the only one, nor were they the first either, really. Yes, in some areas they were first on the market.

Many of the major ("old, boring") car manufacturers are growing on the EV segment and will overtake Tesla soon if not already there. For example, BMW i3 has sold around 100k units now, about a third of Teslas. Overall the market is dominated by the Chinese manufacturers.

Tesla got where they are because of the media skills and connections of Mr. Musk and the media amplification that follows. With Mr. Musk gone I see rather dire times for Tesla as a company, regardless of whether the company is sold to someone or not.

Full disclosure: have never driven a Tesla but have seen it zoom to a tiny dot in the horizon in a really short time when the traffic lights turned green.

> For example, BMW i3 has sold around 100k units now, about a third of Teslas

Reminds me of the "No wireless. Less space than a nomad. Lame." wrap-up the Slashdot editors gave[1] to iPod upon release.[2]

Any Tesla model is an exciting car, due to performance and handling, the sheen of EV greenness, and the otherness of experience[3], while still being a no-compromise daily driver. Even the range anxiety on longer trips is a strong emotion, count it as a long-term advantage, and yet another spark for endless discussions mentioning the brand. Contrast that with the i3 being mid-to-lower-end model among BMW offerings, and excites close to nobody.

There's no trick in bringing a boring, incremental car to the market; any large company can do it. Nor is it a springboard from rags to riches; it can only work in a slow-moving, low-innovation market, which new car market used to be for decades, but apparently got hot again.

The trick is to bring something that has appearance of new&fresh, that will set an industry-wide trend, will appear to push the envelope, and will make customers into excited fanboys queueing up for the goods, or preordering a year in advance. This is much harder for an established player, due to Innovator's Dilemma, and the inertia of any large organization.

BMW i3 is "yeah, I save a bunch of $$$ on gas, and I can usually fit the groceries in the trunk"; Tesla is, "I GOT 10k LIKES ON MY LUDICROUS MODE VIDEO ON YOUTUBE AND MY SIGNIFICANT OTHER WAS SCREAMING ALL THE WAY ALSO SUNROOF <3 AND I CAN LET GO OF THE WHEEL". Emotions.

Tesla is like the (early) fast and exciting X.com/PayPal among boring old banks with their wire transfers, rather than like umpteenth "also-ran" online payment processor we get every few months.

> Many of the major car manufacturers (...) will overtake Tesla soon if not already there

The IBM overtook Apple for several decades, in no small part thanks to the duopoly with Microsoft and their EEE tactics. And yet here we are, Apple > IBM. However IBM PC was effectively an open platform, while the modern passenger car is at best half-way such. In this race of Tesla against the proverbial Detroit, I bet on Tesla; and I put Elon's antics in the assets column rather than liabilities, with a "any PR is good PR" note.

[1] https://slashdot.org/story/01/10/23/1816257/apple-releases-i...

[2] and then there's the response Dropbox got early on on HN

[3] granted it's not for everybody. Just like Mercedes and BMW fans deride each others' ergonomic&stylistic choices.

`every other car manufacturer iterates on multiple models every year` - that's not actually true. Every other manufacturer maintains the same base for their cars and simply swaps small details around to make it look like you are getting a different car. You are not actually getting anything radically different every year; not even every decade really.

Car companies work on a new model around every 7/8 years with a minor change at the halfway point. Essentially every decade most of the cars gets a complete overhaul.

it is actually true. many manufacturers, say kia, have multiple models. that's a fact. then, they iterate on these models every year. that's also a fact. yes, it is true that they typically have a major design on a specific model that is then kept around for multiple years, but they are still iterating on them rather heavily.

"simply swaps small details" is undercutting the improvements made to the cars, especially with fit and finish, something tesla is rather poor at in my opinion.

my statement is accurate and didn't imply that they redesign the car every year. everyone knows that isn't how it works.

Whether Tesla itself is the future or not, I don't know. I doubt Musk really wanted to be in the business of building cars. I think he did it to change the way everyone else builds cars. Not by decree of some minor increment in emissions standards, but by showing that an electric car would be cheaper, cleaner, faster, and sexier. He did it at a time when Prius was the laughing stock of the evening news, with stories of Prius tipping, and jokes about its drivers. Does Kia really have a higher safety rating than Tesla?

I agree with other comments that things like his fight with the diver was unhelpful. I don't know what was really behind the threat to take things private. Hopefully he learned something and will focus again on what he does best.

Sometimes, established industry needs someone from outside to threaten do do something even if it isn't the most profitable thing to do. I remember when iphones were charging for ringtones and wallpaper. Google's decision to make an open source OS, and threat to build a phone for it if no one else would, changed the whole game.

I'd rather invest time or money in Musk, despite the risk, just because he built the car, landed the rocket, and I want him to be able to do it again. I can respect an investor who just wants a safe return, but they should invest elsewhere and good riddance. He doesn't need that kind of investor always threatening to pull their money if he doesn't play it safer. Maybe instead of going public, he should start the world's largest Kickstarter.

I'm going to push back against this narrative, because it seems a lot of the "let Elon be Elon" arguments are neatly encapsulated in this line:

Tesla is doing wild things which are causing crazy growth, but also crazy panic.

But the critics of Musk's behavior would respond, I think correctly, that there is a categorical difference between "wild things which cause crazy panic because they are high risk with high upside potential ('crazy growth')" and "wild things which cause crazy panic because they are high risk with little to no upside potential." And while perhaps sometimes it's difficult to tell whether a certain Crazy Elon Thing falls into Category A or Category B, things like "let's accuse someone who criticized me of being a pedophile, that'll teach him" or "hey, we have nothing signed and this blatantly violates SEC rules, but screw it, it'd be funny if I said we were going private at $420 a share, because 420"? Those are very clearly things that are in the "little to no upside potential" category.

Indeed, but at end of the day he's human and sometimes we say stupid things driven by emotion.

You have to weigh the good and the bad, and thus far I'd say it's no contest. Elon has contributed far more upside.

I have a hard time seeing arguments against the SEC taking action-- especially here-- as anything but overcomplicated rationalizations rooted in a personal adoration of Elon Musk. Basically, "I like Elon Musk and so I don't want anything bad to happen to him."

But (a) laws don't work like that (b) selectively enforcing rules (especially those designed to prevent fraud and deception) isn't justice or ethics, and (c) he genuinely did something wrong-- multiple things wrong. He deserves to face adverse consequences for those choices.

This reminds me of the heart surgeon student who avoided jail time for attacking her partner with a knife because she 'showed potential'.

People are perhaps sympathetic to Elon because he shows more potential than other CEOs, no? Did the judge in the case above show leniency because 'he liked her'?

For b) rather than selectively enforcing rules, this would be an example of discretionary punishment, which is absolutely a part of justice and ethics, as in the case above. Some could interpret your argument to support mandatory minimum sentencing, which many don't believe works.

Disgressionary punishment is based on the severity of the crime, not the 'potential' of the person. You just described bias.

should be. In reality it is at the discretion of the judge.

I liked Musk because he seemed to play the engineering adventurer card. Not willing to submit to the average market opinion on how to do things. For instance Model S got more safety and performance than many cars. It started to fade with Autopilot which was way more gimmicky and rushed than the rest. The latest period was just chaos.

> These articles about Elon are interesting to me because Tesla could not have become such a valuable car company in such a short time if it wasn't for Elon, and that includes his personality.

> Yet, many couch investors would prefer to have a CEO who is stable, boring and predictable. People want to put their money in for steady long-term returns, and not worry

A much simpler explanation, lacking the conflict, would be that early, start-up hungry investors prefer the rockstar CEO, and long-term investors would prefer a business-seasoned CEO.

To which I would say: Tesla has been around for 15 years (longer than Facebook!), and as the fans frequently profess, its market capitalization has (in the recent past) already surpassed that of other established car manufacturers. Perhaps it's time to leave the startup image behind.

I can want a risk taking, belligerent CEO with huge expectations that demand results.

I can also want that same person not to make unfounded, potentially illegal, and highly monitored claims regarding the company's trading status that could land them in court.

And not insult rescuers as pedophiles, etc.

Basically, what chipotle_coyote said.

You can want these things but the world does not have to deliver for you. A institutionalized version of that mentality is exactly the problem; organizations like the SEC fundamentally exist because 'someone has to protect' people's ability to inflation-proof their nest-egg. People should not question why their nest-egg should have to be made inflation-proof in the first place.

You really think that demanding that stock prices aren't unfairly manipulated by inside players is a step too far? That insider trading should be alright?

> That insider trading should be alright?

Not commenting on the specifics of this case, but some economists argue that insider trading should be legalized:

https://en.wikipedia.org/wiki/Insider_trading#Arguments_for_...

Elon musk brings entropy, with entropy comes higher reward.

Except its important to get the direction of causation right.

Trying to achieve higher rewards generally necessitates risk taking. Desire for the first leads to the second.

High entropy events, by themselves, do not necessitate greater possibilities of higher rewards. There is no great benefit to sticking your face in a fan, as high entropy as that might be.

So the question comes, has Elon lately been doing things high entropy because he's chasing higher rewards by doing them, or are they just high entropy because they're high entropy.

At least for a couple of recent "Elon specials" (paedophile smears, SEC, dope smoking), it looks to me like you would be very hard pressed in arguing that this individual isn't one just partaking in "face in the fan" type entropy...

I think everyone is in agreement that we'd like the good parts of Elon Musk without any of the parts that have got him into trouble recently, but that's kind of a difficult ask. It also seems a lot less rude than confronting a CEO of a declining company with the question "Why are you so good at deflecting bad media and so bad at innovating?"

Please let me know if you can find any perfectly behaved geniuses with a track record of pioneering multiple world-changing companies/technologies.

No.

I don't remember Steve Jobs calling random people pedophiles or committing a little light securities fraud while high.

Elon brings incredible value to his companies. He also brings incredible risk. The error his fans make is in assuming the two are inseparable--that you can't have the space visionary without the libel, or the automotive and energy revolutionary without the fraud.

I think this is a mistake. You could solve most of Elon's problems by giving someone the ability to preview his tweets before he sends them. I can't see how putting a broadcast delay on his twitter feed would stop him from building cars and rockets.

Steve Jobs stole $5k from his best friend Steve Wozniak https://www.ibtimes.co.uk/steve-wozniak-cried-jobs-kept-atar...

He denied, for many years, that he was a father of his daughter and, while a millionaire, didn't support his daughter or her mother financially.

He was investigated by SEC for, wait for it, securities fraud (stock options backdating including his 7.5 million stock options). He wasn't charged. His CFO and General Counsel weren't so lucky. https://www.cnet.com/news/how-jobs-dodged-the-stock-option-b...

He certainly was an actual frequent drug user, not a one time marijuana puffer.

And many more https://www.businessinsider.com/steve-jobs-jerk-2011-10#ever...

This is not to say that one jerk justifies another but to point the power of narrative.

Musk has already achieved more than Jobs (I put creating 5 companies and dominating fricking space industry, from nothing, in less than 2 decades a bit higher than overseeing development of iPod and iPhone).

But make a few mis-steps on twitter, report it nationally by click hungry press and suddenly he's irresponsible, reckless, drug addicted man child who has to be reigned in by adults.

Did Musk created his rocket all by himself? Or did he merely overseen the development?

Also, Jobs did far more than iPod/iPhone. Both in Apple and in his other companies.

Everything we have heard on the subject suggests he has done meaningful engineering work on the rocket. This fact should not at all minimize the contributions of others, which are also very substantial. Nor should it take away from the accomplishments of Steve Jobs.

I’d also mention creating a cartel with other tech companies to keep wages down.

Not just wages, but mobility, there is a person attached to those wages.

I put creating 5 companies...

Zip2, x.com, SpaceX, Boring Company. Elon didn't create Solar City or Tesla. What am I missing?

Apple did more than ipod and iphone. You also missed Next and sale of Pixar at $7 B

I invested in Tesla because I couldn't buy stock in SpaceX. But I view it as buying a lottery ticket, and just to join in the fun of what Elon is doing. I didn't buy enough to engender much angst if it goes to zero. I just want to be a part of it!

Yeah, the shorty meme brigade with their 'short air force' patch meme campaign convincing the New York Times to run a ridiculous story about cars parked in a parking lot is also very interesting.

We live in a post-IRA revelation world.

Personally, I think Elon Musk wants out of Tesla. The things he did lately, all point to this conclusion. Maybe he lost vision or interest in the company, but leaving from his own will would jeopardize the future of the company, since most of Tesla's backers are fans of him. Arranging himself an exit in this way, would make it look as he's the victim left with no choice but leave.

Very thought provoking.

I'd like to add that this could be the case 'subconsciously' without him realizing or rationalizing it to himself.

Continuing my original thought.

This guy has been married to this company and it's what brought him the fame he has today. Surely, he was successful before starting Tesla, but at least from how I started to know about him, it's as Tesla's CEO.I can only imagine that subconsciously he feels very connected to the company.

I've deliberately used "married to Tesla" because i wanted to make an analogy here. I know very well that some people can start acting very weird in a relationship if they don't feel committed anymore, but at the same time do not have the courage to have a clean exit. They would make all kind of stupid shit to make the perfect scenario to arrange an exit where they would be victimized and their ego would take minimum damage. In my opinion, Musk's personality matches the aforementioned type very well.

Again, this is just my personal opinion, and food for thought, as someone's reply. Time will tell.

Elon didn’t start Tesla and I’m not really sure if he’s really a founder. I believe there was some legal issues regarding founders vs the series A “co-founders”.

Potato Paataeto

> Arranging himself an exit in this way, would make it look as he's the victim left with no choice but leave.

...which would be very convenient if he believed there was no way to meet the company's targets and fix its problems, thus being bound to failure.

...which, coincidentally, is what short sellers also believe and have been warning about for ages.

Thus the "I was forced to leave" spin would be an effective excuse to avoid the blowback and the stigma of failing to perform and deliver on his promises that the company was viable while it wasn't.

He is going to leave and do the promised buyout. The stock price is bargain. Tesla will be privately held company soon. My $0.02.

Curious note I found while trying to validate your claim that current stock price is bargain: if you look at the stock price on Google for the past 5 days, the graph looks like a neural network tried to reproduce Tesla's logo.

Going back to your claim, I dont think a current price of $300 per share is bargain. But with his current behaviour, I can see that happening in the near future.

> Going back to your claim, I dont think a current price of $300 per share is bargain.

Just to drive the point home: what's Tesla's dividend per share?

Obviously, that's a disengenuous argument. Many companies that don't pay dividends are (rightly) valued based on future growth and warnings estimates.

He'd bankrupt himself if he tried to do that. If the share price drops to low all his creditors will margin call him, which would wipe out the vast majority of his wealth.

Am i right that Tesla is his first publicly traded company? Maybe the pressure of continuous spotlight on him + need to keep up with stable CEO status is wearing him down? I no way know him or am able to fully state this as a fact but i feel like lately he seems like he has been under huge pressures, and does not like it. Maybe he just likes to invent and engineer things. Like much worse version of innovative coder/engineer who's inspiration and moral is crushed by soul-eating-meetings day after day after day.

Seemed like an interesting thought when I read it yesterday. But, after reading this article [0] today - it's clear he did not want to come out of Tesla otherwise he'd not threaten his board with resignation.

[0]- https://www.marketwatch.com/story/heres-how-teslas-elon-musk...

Is Elon Musk really an asset that Tesla needs to hold onto? I'll admit that he's a great salesman; but he's also a spoiled child who throws tantrums when he doesn't get his way. If Tesla wants to be taken seriously as a car company -- rather than as a maker of toys for people who have too much money on their hands -- they might well be better off calling his bluff.

Tesla is facing the prospect of needing to sell a honking load of stock at a discount to deal with their debt, and to do that they need a high stock price. While Musk appears to be a liability in many areas, he is the focus for a cult of personality that has made Tesla what it is, and has shown incredible talent for inflating the price of Tesla’s stock on that basis.

So while Tesla as a healthy company without crushing impending debt would almost certainly be better off without him, Tesla as it is only really exits because of his presence. Long term they have to actually make a lot of money and stop hemorrhaging money, and get out of their death spiral. Short term the only way to do that is sell expensive stock, and that stock is expensive because of the cult of Musk.

> he is the focus for a cult of personality that has made Tesla what it is

I disagree. What made Tesla what it is was the ability to design and bring to the market an electric car that people wanted to buy and actually prefered over equivalent ICE offerings, and pulling this off while competing against one of the most competitive and entrenched global industries.

They promised and they delivered. That's what made Tesla what it is.

Everything else is just self-promotion and actually erodes Tesla's accomplishments and goodwill.

A key part of that though, is that Tesla took 5 years before it even produced it's first car, 9 years before it's actually successful model S. Over that time they burned an enormous amount of money and they're 'disrupting' an industry that has 5-6% margins not the silicon valley style 30-40% with 0 marginal cost on inventory. Arguably the differentiating factor for Tesla was the ability to get financing in the region of Billions of dollars for close to a decade in order to break into this incredibly competitive market.

You talk about 'they promised and they delivered' yet Tesla has been a lesson in how a company can continually over promise, under-deliver without incurring any consequences. Just because Tesla eventually became successful doesn't paper over the cracks in it's early days.

Even now, if you're looking at valuing Tesla on what they delivered, well that's fine- but it's not reality. Tesla's current valuation makes them more valuable today than Ford. Which is pretty surprising when the idea of Tesla having the market share and profitability of Ford would be a very optimistic scenario.

I don't believe that personally.

I am a huge Apple fan so this is not meant to be an insult, but to me Tesla is the Apple of EVs.

They made a product that people view above the sum of it's parts.

The fact is the Model S, and the Model 3, are cars that make people stretch beyond their means because they're held in a higher regard simply for coming from the brands they come from, the way the iPhone is, or a MacBook does.

It's what annoys some detractors of both "Why get a Model S, it's insulting to call it a luxury car next to an S Class that costs as much (which is true in my opinion)" "Why get an iPhone when an Android phone has 4x the RAM and a trick display and more apps! (which might be true)".

If another incumbent only did as much as either, they'd fail. GM couldn't make a Model 3 even if they made a Model 3. Reviewers wouldn't be charitable and say the tablet is "Forward facing". They'd call it what is honestly is, cost cutting.

They wouldn't argue Autopilot is improving, they'd be appalled an incumbent made a driving assistant willing to merge into lane shoulders and released it with nothing more than a "keep your hands on that wheel!"

Tesla has charisma, and that charisma imbues anything they make with a halo. That's why they can ask for 1k for a car coming out in 2+ years (or in even more years for the 35k version). That's why they can release AP without more safety guards than Super Cruise for example and not get skewered. Just like Apple can release a phone with a poor antenna and tell you you're holding it wrong, or a keyboard that gets clogged with normal use and tell you to pull out the compressed air.

And that charisma affects investors too. You can tell a TSLA investor from miles away just by how they speak. It's always about "the ride". It's almost always "Elon is saving humanity". It's why the CEO can call people pedos and not be removed, it's why shorting TSLA is probably the worst idea ever, but I digress...

Musk sure sounds a lot like a younger Steve Jobs.

Maybe he needs to leave then come back?

Jobs was ousted by his own team. He didn't leave and just walk back in. Apple was in deep trouble.

I'm not convinced it was somehow better for Apple that it happened. If anything it only lamented that Jobs was required to make it work, which could only possibly leave Jobs with a bigger ego.

Elon Musk might be far better at running multi-billion dollar companies after he grows up, yes.

Steve Jobs was certainly far more "grown up" when he returned to Apple.

When Jobs left Apple, he was 30; when he returned, he was 42. Musk is 47. If he needs time away from Tesla to ’grow up’, he better do it fast.

Your acting as if job change and apple accepted him back. No apple crashed and burn without him as his became more of what he was. He never "grew up" he just proved that his current attitude was correct and the people saying he need to "grow up" were wrong.

Comparing Elon to Jobs is a bit insulting to Elon. Elons achievementts are huge.His former wife also had same view expressed in his biogry.

People who have down voted please explain why Jobs achivements are equal to Elons. It's highly unlikely jobs success without Woz. The same can't be said about Elon

> toys for people who have too much money on their hands

Sounds like the future of privately owned motor vehicles. In maybe 20 years or so I expect most people will be getting around in self driving cars that they hire.

As someone who doesn’t own a Tesla, but did purchase a very crappy jacket they sold in 2012. I can say without Elon I put the whole company in “meh” mode. The truck, the roadster, the 3. All great products. The sense of its technology advancements. These stem from what Elon and the chief designer want. You can sense it. It’s like a heartbeat on the design.

Take Elon away. I’ll buy whatever dumb electric rolls off the lot. I’d only buy a Tesla car because I know that insanely dedicated, incredibly driven, “nutter” is still in charge of what happens. And the Easter eggs make the whole thing interesting. A normal CEO will never ok the things Elon does.

Where does you intimate knowledge about Musk's psyche stem from? Purely inferred form his public persona or do you have first-hand information?

I ask because this sounds a bit like a cultist describing the cult leader.

It sounds like a fan describing a celeb. Saying this isn't musk pscyche ignores the clear and consistent pattern his business and his business decision have.

There used to be a sort of tradition that you started with the inexperienced startup CEO. Then, when the business became large, the board got someone with experience running a big company. That's changed in recent years. Page and Brin are back running Google, Jobs came back to Apple, and Zuckerberg is still in charge at Facebook.

On the other hand, Uber got rid of their startup guy and got a manager type, who has been getting their losses under control, and something similar happened at Twitter. In both cases, the company had operational problems and cost problems, but plenty of users/customers.

That's the Tesla situation. Product is OK. Customers are enthusiastic. Production is in trouble. Cost and labor hours per car are way too high. The financial situation isn't good. That's usually when the board and stockholders put in an operations-oriented CEO.

> That's the Tesla situation. Product is OK. Customers are enthusiastic. Production is in trouble. Cost and labor hours per car are way too high. The financial situation isn't good. That's usually when the board and stockholders put in an operations-oriented CEO.

And in doing so risk that the company becomes another GE-like corporate which is no longer able to innovate and inspire people.

Things have changed. Markets have changed. Innovation cycles have become much shorter.

> Innovation cycles have become much shorter.

Yes, but you need to build up a world-wide customer support network that is willing to learn these new innovations that fast at a modest rate.

If Tesla would stay in the performance car segment, then the company doesn't need to scale the customer service that much. If you smash a bit your McLaren, you accept that only a handful of companies can fix it. But when you want to roll out and dominate the average joe market with the Model 3, you need to be able to sell it with a moderate maintenance cost. That can only happen if the local car mechanics are able to fix it, but this unlikely happen if every new model comes with radical changes.

You, nor your local mechanic, can work on teslas. While your mclaren dealer would freakout, and your value perhaps drop, you can poke into whatever guts you want. Until you can OWN a tesla, I think they will stay a cult minority.

> Innovation cycles have become much shorter.

This is constantly being repeated but I doubt it is true

Just one very popular example: the length of the Walkman lifecycle was about 30 years. How long was the lifecycle of the iPod?

Do you have any evidence to support your claim? I'd be honestly interested.

Let's say the speed of long distance travel.

I dropped dramatically when railways were invented and dropped again when commercial airliners became common.

In between these short bursts of innovation, not much has happened.

I just noticed though that I may be talking about a slightly different thing here, speed of innovation vs product life cycles.

If you're going to look as far back as the creation of the railway, I think a more accurate perspective is that it took a few thousand years from the dawn of civilization to the railway, a hundred years from rail to cars, a couple decades from cars to popular commercial aviation. Speed of innovation accelerating still applies.

> Customers are enthusiastic

Right now, part of Tesla's selling point is that you are buying a car "made" by Elon Musk. The image of him being a visionary and you get to buy into his future is part of the brand.

If Elon leaves the company, especially if there is bad blood, a lot of that enthusiasm that customers have may drop off. Tesla with some faceless CEO starts to look a lot more like just another luxury car company.

Tesla without Elon may actually make a better product and may be a better company, but it becomes a lot less marketable.

And then slowly after years of being managed by an experienced operator, a company loses its ability to innovate until the manager is removed. See Microsoft with Ballmer -> Nadella

Except that part of Tesla's funding is the preorder cash.

If Musk goes and 50% of the preorders cancel and demand their money back, Tesla pretty much shuts down, no?

> They had passed on Thursday’s generous offer, and the S.E.C. felt compelled to extract greater concessions. The ban on Mr. Musk’s serving as chairman went from two years to three, and his fine doubled to $20 million. Tesla will also pay a $20 million fine, and Mr. Musk agreed to personally buy the same amount in Tesla stock.

The extra year of not being chairman seems immaterial if threatening to quit got the board to shoot themselves in the foot, so he basically paid ~$10 million to loudly proclaim his innocence for 48 hours?

No, under the settlement he gets to claim perpetual innocence (ie. no intention of doing $420 on purpose). For him 10m is spare change, so long as it means he gets to maintain integrity.

Also, as reported in another article, this non-admission of guilt makes it much harder for the DOJ to go after him with a criminal case.

$10m cash is absolutely not spare change for someone as leveraged as him, ditto for Tesla.

According to the article, the settlement does not let him proclaim innocence (but it doesn't require him to admit guilt). As I read the article, this part was the unchanged between the SEC's first offer and the eventual settlement.

Exactly. The original deal was:

1. No admission of guilt

2. Bar from chairmanship for 2 years

3. $10 million fine for Musk and $10 million fine for Tesla

The final deal was:

1. No admission of guilt

2. Bar from chairmanship for 3 years

3. $20 million fine for Musk and $20 million fine for Tesla

So the 48 hour delay brought Musk nothing in return.

[0] https://www.theverge.com/2018/9/29/17918252/elon-musk-tesla-...

[1] https://www.nytimes.com/2018/09/28/business/elon-musk-tesla-...

Importantly, both deals also require adding two new independent directors to the Tesla board.

Who will, one presumes, get to see the company’s books, and then vote on what to do about those numbers.

Elon Musk is not crazy or some super genius calculating 20 steps ahead of everyone else - he is simply a man who does not like being pushed around and being told what to do. I'm no psychologist, but having read his biography and having dealt with many adults who were bullied as kids, it makes perfect sense from my experience as to why he is reacting the way he's reacting. I suspect that the perception (be it real or imagined) of being picked on, (by the SEC, by his board, by the short sellers, etc. etc.) might simply be too painful for him to allow any rational ( i.e. ego-free) thoughts to win out. This and his inflated ego (a lethal combination) may be the reason he's digging his heels in.

Yes, that's what most people think at this point. If you look at pictures of his mother you also know who bullied him as a kid (and maybe even today).

This makes no sense to me. If the reporting is correct he screwed up by sending the Tweet without having an actual deal or planning in place.

I’m hugely inspired by the guy and think he’s brilliant to the point of being a bit of a fanboy, but I also think everyone should have to follow the law and play by the rules even if they are brilliant.

He had planned it including a communication to the board. he had talked to at least 1 investor plus himself so felt he could round up the funding. His other company has overcome the shareholder limit. He said he was “considering” it. It was twitter. Shareholders are much better with him at the helm. Etc, etc.

This is simply not true.

Having a hunch you can get some money, is not securing funding. This is just like when Bart Simpson tells Milhouse he can read lips, and then admits he doesn't know what's being said. ("I thought you said you could read lips!" "I thought I could!")[0] It's fraud.

He said "funding secured" after an initial 30 minute chat. That's not a deal. That's not even a verbal agreement to make an LOU. He also did this without telling anyone on the board. The SEC even released text messages from the board and staff that directly asked him after his tweet "Is this true?"

Asserting shareholders are better with him, is highly debatable. He has run 3 companies simultaneously, put his brother in charge of one, and then when it started to fail, bailed it out with a merger with one of his other companies, then promptly spun up a third company because apparently he has to have three. The celebrated car company has serious logistics and manufacturing problems, and is deeply in debt, and doesn't make a profit.

Ironically, what might be his most successful venture isn't even public.

[0] https://deadhomersociety.com/2013/06/18/quote-of-the-day-155...

I'm not sure why anyone would think a tweet that included "considering" would constitute a "deal".

The tweet came from IR, not the board. The board had been apprised of his considerations.

The deal sounded pretty good. They should just fire him. Maybe he is not the leader they need right now.Maybe he will mellow out after getting fired.

May be Tesla will get bankrupt

If the fine is intended to be punitive or act as a deterrent, it surely fails. Musk's net worth is over $20B, so a $20M fine is <0.1% of that. At this rate, he could violate securities law 999 more times and he'd still be a billionaire.

It's a joke really, most Americans are lucky to even have a positive net worth. A traffic ticket hurts your average American much more than this fine hurts Musk and he committed a much larger crime than parking in the wrong spot.

> most Americans are lucky to even have a positive net worth

The median American has a positive net worth of around $55,000. That's higher than Germany or Sweden, and just below Finland.

> A traffic ticket hurts your average American much more than this

The average American has a positive net worth of over $300,000 and represents the fourth richest average of any nationality. As such, the average American would shrug off a parking ticket every bit as much as Musk would shrug off a $20m fine.

https://en.wikipedia.org/wiki/List_of_countries_by_wealth_pe...

These net worth figures don't take into account the differences in social models. The average German has been paying more taxes for their entire life. In exchange, their net worth won't be affected if they get cancer, they will get help if they go broke, etc. Comparing net worth figures directly doesn't sound fair to me given these differences...

Your premise doesn't explain why France - which has a far more expensive welfare state than Germany - has a median net worth roughly three times that of Germany and Sweden.

Or why Belgium is nearly 4x that of Germany. Or why Italy is 3x that of Germany. And so on. It's very clearly a problem that specifically has to do with Germany. Even South Korea, which has only started to become affluent in the last two decades, is well ahead of Germany and Sweden (and the US median as well).

You're also making the excellent point that Americans should be far worse off than Germans and Swedes, because they should be going broke constantly due to medical bills. And yet the American median wealth is still higher.

The US spends as much on its welfare state as a percentage of its economy, as what Canada and Australia do, and is just behind Switzerland.

The median American receives healthcare through their employer. That directly detracts from their income potential, and given how expensive US healthcare is (typically 60% to 80% more than other developed nations), it detracts in a very big way. By your way of thinking, we should account for that massive gap in cost of healthcare and how it impacts income figures (which impacts max savings potential). It's certainly not fair to account for Germans paying into taxes for eg healthcare, while ignoring that Americans lose out on income in the relationship with their employer due to the immense cost of healthcare in the US: that is the tax.

> It's very clearly a problem that specifically has to do with Germany.

It's not even a real problem, because the primary cause is that housing costs in Germany are much lower than they are in most other places. Correspondingly the homes people own aren't worth as much, but they don't care because they're using housing as a thing to live in instead of a thing to prop up their net worth on paper.

I think part of the answer might be that Germans invest much less than most other nationalities. They do save, but in times of practically non-existent interest rates, that does not get you very far.

I think for France it has to do with real estate. French people like to own their property while it is much less common in Germany. As property prices have skyrocketed (to the point of becoming a social problem), lots of people are asset rich without necessarily having the corresponding revenues.

Not to be "that stats guy", but i think the phrase you're looking for in your second paragraph there is the "American average", which is a totally different concept from the "average American".

If you must use the concept of an average American (which I'm generally against because people/entities with multiple dependent and interlinked characteristics are not numbers and so average is pretty ill defined), I think general consensus is that your first measure of median would be more appropriate.

You selected the mean ($388,585) instead of the median ($55,876). One is America's average net worth per person (adult); the other is the net worth of the average American.

Given that these values differ by over $300,000, that's arguably even less accurate than saying that the average American's net worth is below zero.

EDIT: misread original comment's mention of median figure, but given its overall assertion in the context of this discussion, I'm leaving this here.

This comment seems pedantic, disingenuous, and perhaps misleading all at once.

By the average American I meant "a typical American," which is admittedly a murky term, but I doubt most people would take this to mean the literal mathematical average.

I'm a little surprised to see that the median wealth per adult in the US is $55K. It sounds high. Does the Credit Suisse report the Wikipedia article is based on define wealth to mean actual net worth, as in assets minus liabilities?

I think the average American household has around $100K in debt. You can lawyer those words all you want, none of it will change the fact that ordinary people have a lot less money than Elon, and are hit harder by a traffic ticket than he is by this fine.

I think that when you made this reply you weren't making a good faith effort to understand my point. Cherry-picked pedantry of this sort doesn't advance the discussion of the larger issues.

Are you referring to (a) Musk or an average Musk?

Plus anyone else would face a criminal investigation for attempting to manipulate the market to squeeze short sellers.

The fine is to be repaid to the short sellers (the ones he tried to punk by claiming the privatization deal was done).

That must be particularly galling to Musk.

I thought it was a fine, not damages. Fines typically go to the SEC.

>The $40 million in penalties will be distributed to harmed investors under a court-approved process.

[0] https://www.sec.gov/news/press-release/2018-226

I thought the original deal included a ban on being a public company officer/director, and the new one was restricted to Tesla. Matters for SpaceX, which might go public, and which I hope he cares a lot more about than a car company.

That was the threat the SEC put in their public filing after Elon/Tesla turned down the first offer.

Both settlement offers included Musk stepping down as chairman for a period, but being able to remain as a director.

The suit filed after he rejected the first settlement included the threat of banning him from serving as a director.

Ignoring everything else it does seem like he needs therapy of some kind, not for mental health reasons, but for learning to better control his impulsiveness.

As to any of his other behaviors: ehn. I don’t have enough money to be effected by his antics :D

Didn’t his ex-gf mention he was on acid during the “funding secured” fiasco?

I wonder if drugs are contributing to it.

No, she didn't.

You’re right. It was a random comment by a friend of his gf who claimed to have visited his house during the crisis.

Who also leaked some other info about elon, from his gfs texts, about things less concerning to investors, but indicitave that the allegations hold more weight than just some random comment.

I do not know if he was on drugs during the twitter thing (most recent 420), but Elon Musk in the last year (only in the last year) has been upfront about his trauma with his parent divorced and his father who was messed up and did not have anything close to a traditional parenting methods let alone boundaries with his children.

Elon Musk has trauma, and it really shows on his personality. Everyone "loves" his innovator / save the world complex, but put another spin on it and it reaks of an "Atlas Personality / Complex" where you were forced to grow up too fast and you feel the whole world is on your shoulders (you must save it.)

>"Mr. Musk threatened to resign on the spot if the board insisted that he and the company enter into the settlement. Not only that, he demanded the board publicly extol his integrity."

This sounds as though the board is there to serve CEO. Isn't the purpose of the board to make sure the CEO is accountable to shareholders? Is the board just there to satisfy regulatory compliance? What am I missing?

He approached it perfectly. I mean seriously, what’s the worst that could happen? He leaves and the company sells out to Apple? Sure, progress would slow but Apple wouldn’t bungle it.

Meanwhile he would get to focus on the weightier innovation at SpaceX and The Boring Company (disclaimer, am a SpaceX shareholder and secretly this is exactly what I want)

You have SpaceX shares? How?

> You have SpaceX shares? How?

Presumably he work(s|ed) there.

There is a Paul Sutter at SpaceX: https://www.linkedin.com/in/paul-sutter-csp-44270370/

But I think it's actually this Paul Sutter: https://www.linkedin.com/in/sutter/

based on these comments:

https://hn.algolia.com/?dateRange=all&prefix&page=0&sort=byD...

https://hn.algolia.com/?dateRange=all&prefix=false&page=0&so...

So we're talking VC amounts equity, not employee stock.

Privately held limited liability corporations still have shares, but you can’t buy them on the stock exchange.

It's so creepy that there is a Twitter account out there which has publicly confessed to be intentionally spreading hostile news for the purpose of feeding confirmation bias as a social media experiment and that the stories they are pushing are turning out to manipulate the news cycle to the extent that it does. It's actually disgusting, how successful they are.

The entire movement is so suspect when you look at its loudest people. A bunch of Twitter accounts, many of them intentionally anonymized with troll names, and photoshopped images of Elon Musk as their profile picture. Hundreds upon hundreds of retweets of each other. Then mocking nearly every Musk twitter post with whataboutisms to drag audience to their filter bubble.

Here is raw data about Tesla sales compared to the sales of every other electric vehicle manufacturer for the last several years:

- https://insideevs.com/monthly-plug-in-sales-scorecard/

It's not just twitter it's every sm platform including hn. All the anti-musk/tesla rhetoric gets upvoted to the top even when it's blatant misinformation and right wing propaganda talking points. That's why I take all these comments with a grain of salt. I doubt all these are legit comments. There could be one person with dozens of accounts, it's not difficult to use a vpn to cover your tracks

The fun thing is that being a good CEO/board tweeter is not that difficult. Some guidelines and judgement would probably be good enough.

Is this him resigning in the same way Yukio Mishima committed suicide?

Hyperbolic, sure, but the article has a Yale prof straight-up invoking Jonestown in describing this move.

Where's his dedicated young second? Kimbal?

> Is this him resigning in the same way Yukio Mishima committed suicide?

This seems like an obscure reference (I am not Japanese). Care to explain?

According to https://en.wikipedia.org/wiki/Yukio_Mishima:

In 1970, [Mishima] and three other members of his militia staged an attempted coup d'état when they seized control of a Japanese military base and took the commander hostage, then tried and failed to inspire a coup to restore the Emperor's pre-war powers, in accordance with Mishima's conceptualization of the Kokutai. Mishima then committed ritual suicide by seppuku. The coup attempt became known as the "Mishima Incident".

There is also a very good movie about this.

https://www.imdb.com/title/tt0089603/

I assume the “Common Sense” title at the top of the page is NYT-speak for ”Editorial”.

No? Mishima committed actual suicide, this is a quote by someone metaphorically describing the 'strategic plan' of the board, rather than 'this move'.

I mean, a move so elaborate and outrageous, it’s nothing more than a showy way to be terminated on one’s own terms and to save face. Like Mishima’s quixotic coup.

Who cares what these dead media companies have to say? Journalism in the 21st century has a glut of integrity, passion, and ethics. Elon Musk has an outsized amount of every one of those traits. I don't want to hear a snippet of a heated board room conversation; I don't want to read a rumor about who the next chairman of Tesla could be; I don't want to read any sanctimonious, scowling & contemptuous trash about men so great it boggles the mind. Wake up, 21st century San Fransisco dwelling technophiles & web developers: We have an enormous glut of people willing to stand up for truth, freedom, and greatness in America, and maybe we should all cover for our great men when they misstep instead of sneering about their personal lives or "erratic behaviour". We are a country of individuals and we would do well to police our criticisms of the rare individual who can do the thing that needs to be done - accelerate the transition to sustainable energy.

Comments on "the cult of Musk" or speculations be damned.

Whats their source for all this? I can't find it in the article anywhere.

For a lot of popular press you can check out the confessed social media propoganda experiment @TeslaCharts for before-it-breaks-on-the-news coverage of whatever sourceless negative article you want. You can also use it to read deluded stock analysis talking points, since the goal of the twitter feed is to produce a profit via a short position on Tesla, many of the narratives are aimed at influencing stock analysis.

It's hard to predict what will take hold though, since there are literally hundreds of negative narratives being pushed all the time. It's like a Nigerian prince scam.

For example, the recent NYTimes article on the Tesla delivery hubs (cast as parking lots filled with cars that no one wants) were being pushed by the so-called 'shorty air force', a collection of accounts that look extremely similar on the surface to political influence campaigns perpetrated by the Russian Internet Research Agency. Naturally, the sources for this story didn't want to be identified.

I think this stuff turns out to be surprisingly effective, due to the generational forces which influence news propagation. A grandmother loses her fortune when she messes up and gets scammed, but the news makes a bit of extra money due to increased attention when it publishes the right type of FUD.

Just remember that the account is very explicitly telling you that it does everything it does with the goal of feeding confirmation bias and that they are conducting a social media experiment.

Super disturbing results imo. I ended up writing representatives to get them to look at de-incentivizing bot-based influence campaigns run on the internet when I got a sense for the direction things were going. Kind of excited by the fact that the governor passed a law so quickly on the topic. Wheels were moving way earlier than my writing because of the interest in securing elections from similar threats.

Yeah. The fact that I got down-voted for just asking makes me think that crap actually works.

If Elon has threatened his board, then they need to fire him, or resign themselves.

The headline is misdirecting. This was the news from last week. Now they have found a setllement.

Let’s be extremely clear here:

That’s fucking crazy. Musk is acting like a crazy person.

Financial regulators are extremely dangerous. They’re vindictive when spurned, have unlimited resources to fight it out, and are absolutely willing to string you up to prove a point.

Rejecting a sweetheart deal and forcing your board to fight is nuts. Pride goeth before...

Based on the actuality I don’t think anything you wrote is accurate.

What part was innacurate?

Rejecting the deal proved not to be "nuts". Financial regulators aren't that dangerous. Musk wasn't that crazy as proved out. etc.

It was nuts, because the penalties increased. To be able to stand up against the SEC for 48 hours he paid another $10m (compared to the original deal), paid the board $20m (in purchased stock), and lost the chairmanship for 3 years instead of 2.

That’s pretty expensive for 48 hours worth of grand standing.

There’s no way to cast the decision to fight and then fold in a positive light. It would’ve been much easier, and introduced far less stock turmoil if he’d just accepted the first offer instead.

Elon probably screwed himself here. The 'fight it', 'ok, settle', 'nevermind' will not play well on Wall Street. He had a much better chance either fighting it or settling but now he looks unstable. My guess is we'll be looking at a Tesla without Musk soon, unfortunately.

This is just another negative Tesla article from the nytimes. Nothing new, and in the long run it doesn't matter. Elon and Tesla are changing the world for the better. Tesla is growing exponentially and produced 80k cars last quarter. That's what matters.

Musk is just a human like everyone else after all. You know like having emotions, making mistakes and stuff.

How would you act if you'd come that far and then find yourself threatened by a horde of wild short-sellers and then the SEC?

Even though his behavior isn't rational, it's understandable to a certain degree.

What exactly does short-selling Tesla stock contribute to our well-being as a society? Even though I think it's correct that the SEC fights spreading false information on Twitter, it must be allowed to ask this question.

I guess Musk should get some sleep, spare some of his fcks about all of this for later and get someone on his team who is competent enough to talk him out of certain things when it gets hot.

He’s on an ego-trip and he’s out of control. Just to refresh your mind, he recently publicly accused someone of being a pedophile for criticizing some of his activities.

>"How would you act if you'd come that far and then find yourself threatened by a horde of wild short-sellers and then the SEC?"

You act like a leader, ignore it and get back to work.

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