Hacker News Reader

Comment by toomanyrichies | Hacker News Reader

SpaceX does the same thing with Tesla engineers, and they pay contracting fees to do this, which is completely above board legally speaking.

That doesn't strike me as being any better; in fact, it reeks of conflict-of-interest. Software consulting AFAIK is not one of Tesla's normal business verticals. The stockholders deserve an explanation for the following questions, at a minimum:

1. Why is engaging in said consulting the highest-and-best use of Tesla's resources, from a profit maximization perspective? The fact that there's a precedent set with SpaceX isn't a justification, since SpaceX is another toy in Musk's toy chest, so the conflict of interest remains.

2. What rate is Twitter / SpaceX paying Tesla for said services? Are those friend-prices or market-prices? If the rate is either too high or too low, Musk could be accused of self-dealing.

3. What kind of bidding process did Twitter put out on these consulting services before settling on Tesla? If I'm one of the investors funding this Twitter purchase, I'd want to know. I wouldn't be surprised if the SEC wants to know, as well. How do Twitter investors know that they're getting the best bang for their consulting buck with engineers whose industry focus so far has been automobile-specific?

4. Lastly, what work would these engineers otherwise be doing at Tesla, and what happens to the product roadmap of those teams now that they're working with fewer resources? Musk is already notorious for promising new features are just around the corner, and failing to deliver. Missing a launch date because supply chain issues is one thing; missing it because the CEO yanked key engineers off the team to go QA his new hobby horse is something else. Such a date miss could have financial implications for Tesla, which would negatively impact Tesla investors.

The MaterialsScience team works across SpaceX,Tesla,BoringCo

I heard that what typically happens in this situation is that one company pays the other a consulting fee. In this case Twitter paying Tesla.

Even something like that pay-for-pto plan seems so flirtatious with trouble. It’s not a move that’s in the fiduciary interest of Tesla shareholders, and mixing personal money into it might even make that more clear.

Elons got a large bench of people who cheerled this thing, ask Larry Ellison for some people who can go audit this thing over multi-months.

Exactly. The more I thought about it, the more the pay-for-PTO thing strikes me as its own separate ethical quagmire. See my other comment in this thread for specific questions that both Tesla stockholders and Elon's Twitter co-investors should be asking now.

Are you a Tesla shareholder?

This isn't an opinion/confidence issue, it is a legal one. If there is even one shareholder (i.e. anyone in the world with $228 to spare) who wants to push this issue, they can. Realistically it would take more than that to make it worth suing, but the point remains that even if 98% of shareholders think this is totally okay, it could still be a huge problem for them.

Additionally, there are various institutional shareholders that don't operate based on their personal opinion of Musk/Tesla, but have specific legal duties to protect their investment in the company.

The SEC could still act on the issue even if it was somehow proven than not a single shareholder actually cared.

Do I need to be one for my points to be valid?

Not necessarily, but should-ing on behalf of other people is not often particularly useful unless you're already powerful. In the art of persuasion, it can also weaken your case considerably, in the same ways "I'm an atheist, but it seems like these Christians should really think..." style arguments don't tend to do anything to advance either atheism or "truer-to-Christ's teachings" behavior.

In that case, for the record a major part of my retirement fund is taken up by the Fidelity 500 Index Fund, and 2.34% of that portfolio's position is TSLA stock. So yes, you could say I'm a stockholder.

EDIT:

> should-ing on behalf of other people is not often particularly useful unless you're already powerful.

Solidarity labor strikes, where one union strikes to show support for an unrelated striking union, would be a counter-example to this. As individuals, the striking workers are not powerful, but collectively they can have an effect.

With TSLA in the S&P 500 it's difficult to avoid being a shareholder

Twitter is going private Nov 8

I wonder how much damage short-sellers & tech journalism have caused tesla through twitter? There might be some business justification here.

Reply on news.ycombinator.com