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Comment by mint2 | Hacker News Reader

“ continued layoffs have even worse optics, given Tesla’s move to ask shareholders for a $55 billion payout for its CEO just days after firing 14,000 people. That $55 billion could pay for 40 years worth of six-figure salaries for those employees.”

Musk is detached from reality. He seems to think firing most of X is a resounding success and Tesla, a car manufacturing company, needs to do the same. Also that cost cutting and performance reviews only apply to others, just like in Twitter and elsewhere free speech means his speech not critics.

I really hope he doesn’t wreck spaceX too.

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It's a way to inject "office heroics" via fear, but it also has its limits. Once the burnout sets in, everyone is just part of the death march at that point, seeing the product or the company to its slow demise.

I think a sad part of the calculus is there are lots of bodies willing to be thrown in the grinder. The only danger is a real competitor with a different business model that lets them treat people better.

Case in point is AWS. I've been reading they are a PIP factory for the last couple of years. Doesn't seem like they have a major issue hiring (partly due to lack of a competitor who is doing better).

This is one of those things that Software Engineers don't believe until there is an extended Bear market: There is always a line of eager beavers outside your company's door just waiting to take your place if you leave. The last decade (especially the hot job market of 2020-2022) lulled everyone into a feeling of job security and even irreplaceability.

I wonder if there's a slight possibility that Musk stopped caring about Tesla's long term success when his payment was cancelled, and he is now willing to temporarily inflate the price and dump the stock.

I imagine he staked quite a bit of Tesla stock as collateral for the many billions in loans still owed for the Twitter purchase. If the stock value declines too much (down 35% this year), his creditors will want a higher interest rate to reflect the higher risk of default.

$10,000 bonus PER CAR that Tesla has sold in its LIFETIME.

stock is a separate product than a car.

investors buy stocks.

customers buy cars.

silicon valley's product is stock.

I knew that he could have reduced the price of these cars... they should cost the same as their ICE car equivalent, or less.

That's not how it works. His $55b isn't in cash the company has and could have just charged less for the cars.

they just charge way too much though... it's a bit like Iphones... but both are not appealing to me, specially at a premium price

It appears that in general most legacy automakers are losing money on EVs and even plugin hybrids at this point. So I doubt there is that much profit in them currently even in the best of circumstances.

Did everyone forget how growth valuations work?

Also that amount was from a contract made in 2018.

I don't think I've ever known how growth valuations work.

Sometimes I feel like the person watching the parade and wondering why nobody else is confused by the emperor's choice of attire.

Tesla now sells as many cars in a year as it did in its whole lifetime up to 2018.

So that’s why it was worth paying Elon that much. The current sales position is tremendous.

It's one thing to say Tesla has been successful. It's quite another thing to say that Tesla's success justifies a market capitalization that is not only the highest in the auto industry, but is greater than the combined market capitalization of the second through fifth automakers.

Despite being the 11th biggest by revenue.

It's true that high-end carmakers seem to get a lot of goodwill valuation simply for being high-end carmakers. But normally not that much.

The current sales position is 1/6 of Volkswagen.

This is completely irrelevant to the original claim (it’s outrageous for elons bonus to be X percent of every previous car) or my point (nurturing exponential growth is worth burning a lot of early cash flow).

Tesla outsells Volkswagen 8 - 16x.

https://cleantechnica.com/2024/02/06/tesla-still-1-in-world-...

Worldwide BEV sales 2023:

VW Group - 742k

Tesla - 1,808k

That's 2.5x, how did you get 8-16x?

And if you include hybrids and ICE cars, the VW group demolishes Tesla with over 9.24M vehicles sold...

From the US.

>> I really hope he doesn’t wreck spaceX too.

I think SpaceX is one disaster away from suffering the same fate, to be honest. Like, if the next Starship doesn't make it as far as the previous attempt (for example, if it blows up on the way up), Elon is going to come in like a wrecking ball.

The pressure on the SpaceX team must be immense.

I gather that SpaceX, too, is cash flow negative and heavily invested in moonshot bets.

Meaning that, like for Elon's other companies, they might be in an incredibly vulnerable position, financially speaking. A disaster could sink the company. But simply failing to have some of these risky bets pay off could be just as damaging. For example, even if everything in the plan works on a technical level, if there isn't enough demand for Starlink's service to support the whole Starlink 2 project then that might turn the entire Starlink 2 project, including the Starship rocket they need to launch these larger satellites, into a big money loser.

Not entirely unlike how we're seeing signs that Tesla may not be a sustainable business, not necessarily because of anything fundamentally wrong with their core business, but because they made some over-aggressive assumptions about how many golden eggs their goose would lay.

> there isn't enough demand for Starlink's service to support the whole Starlink 2 project then that might turn the entire Starlink 2 project, including the Starship rocket they need to launch these larger satellites, into a big money loser

I'm wouldn't worry too much. Uncle Sam probably wants those capabilities anyway for the SDA to ramp up the NDSA now that the Russian nuclear threat is renewed.

https://en.m.wikipedia.org/wiki/Space_Development_Agency

I think the SpaceX disaster is more likely to be a loss of crew event.

you seem naive. SpaceX has made it to MI complex status, and US gov will easily bail them out should worst come.

> SpaceX has made it to MI complex status, and US gov will easily bail them out should worst come.

immaterial: "the worst" here is elon destroying the engineering culture & with it their ability to keep improving on what they've done so far. not going bankrupt (by way of a bailout or otherwise) is a necessary condition for avoiding the worst (boeing syndrome), but it's not sufficient

fedgov can pour money into the military industrial complex, but it can't do a whole lot more, and that only goes so far

Boeing destroyed its engineering culture and it isn't going anywhere.

Suppose for the sake of argument I managed to secure some sort of annuity that pays just enough to subsist on, starting now.

Knowing that I'm guaranteed enough income to stay minimally solvent does not mean I have no reason to care about losing additional income streams that enable me to have things like vacations and dinners at nice restaurants and digital watches.

Similarly, the relative security of the ~1/3 of Boeing's revenue that comes from government contracts is probably small consolation to its shareholders. They do that business more-or-less at cost; essentially 100% of their profits come from other sources.

>They do that business more-or-less at cost;

Aren't all govt contracts cost plus?

Developmental contracts sure.

Buying COTS products; probably not.

Also, the "plus" part covers both overhead and profit. So, depending on what your overhead situation looks like, profit can still be minimal or non-positive.

Sure but the "plus" part is capped [1] for cost+plus.

If you're buying AWS compute through GSA I bet the rate is more than AWS's costs + 10/15%.

Or if you purchase say post-it notes from Staples; I bet they're going to be way more than the cost of paper+glue*1.15.

[1]: https://www.acquisition.gov/far/15.404-4#FAR_15_404_4__d941e...

In other words, Space X will exist as long as there are no competitors. That gives them years, not decades.

Are there any competitors expected to match SpaceX's launch costs or capacity in the next few years?

Blue Origin will catch up any time now...

SpaceX is in a much more solid position. You can tell that Musk hasn't interfered in its operations nearly as much as he has with Tesla or X (case in point: renaming it "X").

Once he rage fires Shotwell.. and given how insane that would be only validates its likelihood at this point

I was gonna say that doesn't math then I realized it's billions not millions.

That's over $30,000 for every single car Tesla sold in 2023.

Oh wow I ended up reading it at millions as well. Likely because 55 billion wasn’t within the real of belief.

Right - I can remember when basically the only number that hit was Microsoft’s market cap.

It's not a cash payout. It's a stock grant that was worth a lot less when it was originally authorized.

It's a weird situation. It sounds like an unconscionable amount now only because of Musk's success in raising the stock value. Like he's being paid too much because he was too successful.

The size of the payout was linked to stock growth targets, so when the pay deal was agreed it would have been clear it would be worth a massive amount if the stock growth targets were hit.

wow i didn't know that tesla only existed in 2023, and all past and future years dont exist

Bonuses are typically annual.

To be clear, the 55 billion is a request to re-authorize his compensation for 2018-2022 that Delaware courts invalidated.

The shareholders that will be voting to reauthorize are not the same shareholders that voted to authorize it originally.

I'm not a direct shareholder, but if the Deleware court gives me an option not to pay $55 Billion that I thought was committed, I'd strongly consider.

What are the implications of not approving? On the plus side, the company keeps the compensation. On the minus side, Musk will be upset; and there's a trust issue for future compensation. On the neutral side, those receiving future compensation will endeavour to follow an approval process that is likely to stand up in court.

Is it really a minus if Musk is upset? If he’s upset enough to leave, that seems like a potentially beneficial outcome.

There’s got to be some measurable number of people who are turned off from buying a Tesla because of his association, especially now that alternatives are available.

Tesla’s current valuation is pretty much thanks to him. His personality meme stocked the company to a valuation that made no sense.

> Tesla’s current valuation is pretty much thanks to him.

And nobody has a larger interest in Tesla's valuation them Musk himself, the largest shareholder.

He can't walk and any threats to that effect are theatrics. Shareholders would be idiots to re-approve the $55bn.

This assumes he cant sell and leave. It would be costly to him, but not impossible. Both sides have leverage in a situation of mutual assured destruction. I dont think it is accurate to only consider the leverage in one direction.

If I’m a shareholder, I don’t want an overly inflated stock price. I want a high stock price due to solid fundamentals. Tesla was temporarily extremely overvalued, but has since lost 60% of its market cap. It’s likely still overvalued compared with peers. It’s a car company, not a b2b SaaS company.

Put another way, which company is more likely to exist in 10 years: Microsoft or Tesla?

Not sure why you are down-voted. If you are an investor, you want a fair price when you buy. Think of going to a store, when there is a sale and prices are below value of a product, it's smart to buy. Same goes with stocks.

If you are an investor, you want an unfairly low price when you buy, and an unfairly high price when you hold or sell.

Exactly

It might be the case that shareholders wouldn't like him when he's angry?

I think the incentives are the same if the shareholders are the same or not. You covered the implications as I understand it.

> I really hope he doesn’t wreck spaceX too.

We don't really need Tesla or Twitter/X. But we really do need SpaceX. He's already moved it to Texas to shield himself from lawsuits, so I wouldn't count on it surviving intact.

> so I wouldn't count on it surviving intact.

why?

The claim about pay is a complete lie. Musk doesn't demand money, he demands control.

The alleged money he asks for does not exist, it is just shares in Tesla, which are currently owned by the company. It's bizarre how misinformed these Journalists are, the real story is far more interesting then just Musk being greedy.

He's personally very wealthy, seems to have some mental issues, and has admitted to having a ketamine habit (although he also claims it's good for share prices). That's a combination that would make pretty much anyone struggle with attachment to reality.

The takeaway for me is that as a fundraiser and hype man, before he ruined his reputation, he was pretty successful, but in all other ways he's a massive self-promoting hack.

He wasn't really talked about as a hype man before, was he? The world is full of them: Adam Neumann, Travis Kalanick come to mind.

The hagification of Musk in the press was on another level, like Steve Jobs, DaVinci and Obama rolled together. That this carefully crafted illusion is falling apart due to his online ramblings and bizarre business decisions is something worthy of study. He and Kanye West share a very similar trajectory in this regard.

> ketamine habit

I don't think you've ever seen anyone with ketamine habit (keywords: UK k-hole).

Pretty stupid thing to say about someone who has medical prescription for ketamine to treat depression while they work 100hrs per week.

Maybe working 100 hours a week to the point that you need ketamine to cope isn't a very bright idea. Based on the Cybertruck and "X", it's easy to see that this wouldn't be his first less-than-stellar move on the old 3D chess board.

> Musk is detached from reality.

Musk is arguing that paying him $55B to pump the stock price is better than paying those employees for 40 years.

If you're a shareholder that only cares about the stock price and not the underlying value of the company - that's a decent argument.

I wouldn't buy it. But maybe the shareholders will.

the fact that this argument is logical in the current economic systems says so much about the sad state of the way we structure our economy...

Meme stocks are as old as time.

> Musk is detached from reality.

Don’t think so, it’s just that he’s focused on another reality - losing the crown of the richest person in the world. And, he’s doing everything to keep that crown, everything else be dammed.

You either die a hero or live long enough to see yourself become Russ Hanneman

Side note: The "Tres Comas" Tequila is actually pretty good. Surprising that it's been 4 1/2 years since it debuted as a promo for the show and they're still making it today, years after the show ended.

He's #3 behind Jeff Bezos and the Bernard Arnault. That was before Tesla's very bad month.

> He seems to think firing most of X is a resounding success

Isn’t it? I use X every day and it seems to be fine now and getting better on a good cadence.

Do you pay for X?

Last I heard he's hemorrhaging paying customers (advertisers) who while publicly say it has to do with <insert popular issue>; privately say it has to do with worsening ROI (targeting).

Is that why fidelity repeatedly writes down the value of their portion of the needlessly name changed company that hemorrhaged advertisers due his personal quirky decisions and favored groups?

It sounds like you’re talking about a different topic.

I’m saying the platform seems to be good and getting better, not worse.

Is it? I used to find myself looking at Twitter due to the large number of places linking to it and orgs posting on it.

Like the local earthquake tracker on Twitter used to be great, it became unusable after musk mayhem as Twitter intentionally only showed many years old posts to those not signed in.

Nowadays that’s super rare. And I used to remember seeing links to a lot of articles published as like 13 tweets, I can’t even remember the last time I saw one of those. I think some used to be linked form HN.

Twitter is basically a zombie now. It’s way worse for the former user base at large.

It’s true that one groups probably think it’s better, those who were banned and are allowed back for example and those who liked the banned accounts.

Is it getting better? The bots have only gotten worse. They even have blue checkmarks[1] and the company does fuck all about it. And that's before we start talking about the massive hypocrisy present in Musk's implementation of "free speech".

1. https://i.postimg.cc/Bbq0yX4J/image.png

"Getting better" how? Be specific?

No downtime, my “For You” tab is interesting, media sharing seems to be good… if anybody other than Musk were at the helm, there’d be nothing here to complain about.

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