Is It Possible to Replace Elon Musk as CEO of Tesla?

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In summary, Tesla is facing some major financial challenges, and some people are concerned about the company's future.
  • #36
OmCheeto said:
Does "TMZ" stand for Time Machine Zone?
Missed that. I just watched the interview outside.
 
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  • #37
Borg said:
Missed that. I just watched the interview outside.
You "just" watched all 3.3 hours of Neil's interview?

ps. I am TOTALLY loving listening to NdGT's interview, and I'm less then half way through.
A thousand thanks, for bringing it up.
pss. Has ANYONE actually listened to either interview?
 
  • #38
OmCheeto said:
You "just" watched all 3.3 hours of Neil's interview?
...
Doh!
@Borg , my bad.
Just finished watching the Joe Rogan - Tyson interview, and realized Neil's comments were not from that show.
Went back to your TMZ post and saw that my internet connection was a bit slow the first time I perused your link.

ps. Tyson dominated that stoner Joe.
 
  • #39
OmCheeto said:
...
pss. Has ANYONE actually listened to either interview?

From my googling of the internet, no one has watched either show.

ps. From Tyson's comment; "Let the man get high if he wants to get high", he didn't watch the Musk show, either.
 
  • #40
OmCheeto said:
in the same article, they said this; "On March 21, 2018, shareholders of Tesla approved a performance-based stock option award to purchase 20.3 million shares for Musk."

From my googlings of the stock price that day, that's approximately 6.4 billion dollars.
I'm not really sure what "being awarded stock options" means. Does that mean they gave him a $6,400,000,000 bonus?
If so, it sounds like his institutional investors have A LOT of confidence in him.

No. It means they gave him the right to purchase stock at a fixed price sometime in the future. He only makes money if the stock price is higher than the option price on the day he exercises his rights (eg by buying the shares at the option price and then selling the shares at the higher open market price).

But what was the option price?
 
  • #41
CWatters said:
But what was the option price?
Employee stock options are usually quite generous for the C-suite (as in: strike price can often be half the current market price of the underlying stock).
 
  • #42
CWatters said:
No. It means they gave him the right to purchase stock at a fixed price sometime in the future. He only makes money if the stock price is higher than the option price on the day he exercises his rights (eg by buying the shares at the option price and then selling the shares at the higher open market price).
...
I will never get used to Wall Street terminology:

"...shareholders ... approved ... to purchase 20.3 million shares for Musk."​

Reminds me of my sisters...

Sisters; "We've decided your furniture is too old, and we are going shopping, and buying you all new furniture."
Brother; "Ok."
Sisters; "BTW, you're paying for it all."
Brother; ":rolleyes:"​

But your comment did make me wonder how Elon could afford such a purchase.
A bit of googling suggests his current net worth is 21 billion dollars. [ref]
His share of Tesla is only worth 10 billion.
But his share of Space X is worth 11 billion, so I guess they are expecting him to sell part of his 54% equity in that company. [ref: $21 billion] [ref: 54%]
Unless, as TeethWhitener has stated:

TeethWhitener said:
Employee stock options are usually quite generous for the C-suite (as in: strike price can often be half the current market price of the underlying stock).

Which indicates he could sell some of his Tesla stocks, and purchase the options at half price?
Perhaps we should go back to whether or not Musk has gone completely mad, as this is making me a bit crazy.
 
  • #43
OmCheeto said:
But your comment did make me wonder how Elon could afford such a purchase

That's easy.

Suppose someone gave you an option to buy 1000 shares at $1 each and they are currently trading at $2 each. You would need to pay $1000 to get shares worth $2000. If you didn't have $1000 there several way to proceed...

You could exercse the option in stages, eg buy $250 worth, sell them for $500 and repeat.

You could sell your rights/options to a third party for say $900 and let them buy and sell the shares. You would make almost as much money ($900 instead of $1000). They would end up paying $1900 for shares worth $2000 so they make $100 on the deal.

You could borrow the $1000 for the few days needed to buy and sell the shares. You might have to pay some interest.

You could speak to the company share registrar and see if they will exercise the options and sell the shares for you without you having to put up any money. You just get a cheque in the post for the $1000 profit less some dealing charges.

You might be even be able to sell the shares before you get them. Although that's not always possible.

If you are Musk your options will come with a lot of strings, such as limits on the number that can be sold and possibly other restrictions. I mean if he sold all his shares at once the market would be spooked.Edit: I've simplified things a lot. There would be some charges associated with many of the above methods but the point is it's not really a problem.
 
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  • #44
OmCheeto said:
A letter from the board of directors of Tesla said in effect that Elon's statement was true.

They said no such thing. They agreed that funding was not secured.

The best possible position Musk can take is that he made an oopsie in not checking his facts before he spoke, and made a materially false statement. This oopsie happened to have cost short-sellers money, and it was entirely coincidence that Musk had previously said "sheer magnitude of the short carnage will be unreal" and (in June), short-sellers had "about three weeks before their short position explodes." Oopsie.
 
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  • #45
Please can you both quote sources. For example...

http://ir.tesla.com/node/18951/pdf

Statement from the following members of Tesla’s Board of Directors: Brad Buss, Robyn Denholm, Ira Ehrenpreis, Antonio Gracias, Linda Johnson Rice, and James Murdoch
August 8, 2018

PALO ALTO, Calif., Aug. 08, 2018 (GLOBE NEWSWIRE) -- Last week, Elon opened a discussion with the board about taking the company private. This included discussion as to how being private could better serve Tesla’s long-term interests, and also addressed the funding for this to occur. The board has met several times over the last week and is taking the appropriate next steps to evaluate this.
 
  • #46
Are you asking if Musk actually said "funding secured"? That was well covered in the media. Are you asking if it in fact was not secured? That also seems well-covered, plus there is the fact that the transaction didn't happen. Or are you asking about the quotes? Type 'em into Google and you'll get over a million hits each.
 
  • #47
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  • #48
CWatters said:
"On funding Musk added...Only reason why this is not certain is that it's contingent on a shareholder vote"

The full quote is "Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote." We now know that investor support was not confirmed, and that there was more than a shareholder vote standing in the way.
 
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  • #49
Vanadium 50 said:
...We now know that investor support was not confirmed...
I guess this is kind of true. I don't see Elon saying "the support" was signed, sealed, delivered, and notarized.

Elon Musk; "... I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving. This is why I referred to “funding secured” in the August 7th announcement. ..." [ref Aug 13, 2018]​

But from the previous comments he made in that announcement, that the Saudis had approached him to take the company private for over a year at that point, I can see how he would say that.

In any event, it's an interesting conundrum, taking a company private:
Tell the stockholders beforehand: Everyone gets charged with insider trading
Tell the whole world: Musk gets charged with market manipulation​

I'm guessing that Elon has a few lawyers on staff, and gave him the best advice.

hmmmm...
Anyone else know how to take a public company private, without incurring the litigious wrath of "the shorters"?

Disclaimer: I do not own any Tesla stock. I am not shorting Tesla stock. I do not own any Oil Company stock. I do own about $220 in Ford stock, as it's value has gone up since 2009, when I bought some for $96. Yay money!
:partytime:
 
  • #50
OmCheeto said:
$220 in Ford stock, as it's value has gone up since 2009, when I bought some for $96. Yay money!
:partytime:
OmCheeto said:
Anyone else know how to take a public company private, without incurring the litigious wrath of "the shorters"?
Which company are you planning to buy and then take it private? :smile: ...
 
  • #51
OmCheeto said:
I'm guessing that Elon has a few lawyers on staff, and gave him the best advice.

Given that he's facing a $1.2B lawsuit and an SEC investigation, I'm not sure I would characterize this advice (assuming he got any) this way.
 
  • #52
May be the best advice wasn't good enough or perhaps was forgotten to be mentioned that the lawyers may be weren't good enough (or at all) ...
 
  • #53
Vanadium 50 said:
Given that he's facing a $1.2B lawsuit...
"lawsuit"? As in singular?

Ah! Hahahhaaha!

Short sellers:
Sept 6, 2018
Short seller Andrew Left sues Tesla and Elon Musk, claiming stock manipulation [ref]​
Long holders:
Aug 11, 2018
One of the lawsuits, filed by shareholder Kalman Isaacs, seeks class action status on behalf of investors who bought Tesla stock on August 7 and August 8. Another, filed by William Chamberlain, seeks class action for those who bought or sold Tesla stock between August 7 and 10. [ref]​
Customers:
Sept 6, 2018
Elon; "People still sue us, for a crash at 60 mph, because of a twisted ankle. They'd be dead in another car." [paraphrased]
[ref: Joe & Elon show @1:33:00]​

When you're at the top of the game, all the rats will come and try and push you off.
 
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  • #54
OmCheeto said:
When you're at the top of the game, all the rats will come and try and push you off.
OmCheeto said:
I would call it "pure genius".

So, let me repeat my last question: " So is it your position that it is a good thing when a corporation's CEO (and a major shareholder) manipulates stock prices by making materially false statements? Or is it that it's only OK when Elon does it?"

Do the same rules apply for Elon Musk as they do for, say Bernie Madoff, Jeff Skilling, Martin Shkreli and Bernie Ebbers? Or is it different because Musk is a visionary and the others are scumbags?
 
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  • #55
Vanadium 50 said:
So, let me repeat my last question: " So is it your position that it is a good thing when a corporation's CEO (and a major shareholder) manipulates stock prices by making materially false statements? ...
You still haven't proven to me that he made a materially false statement.
 
  • #56
He said funding was secured. Funding was not secured.

And you haven't answered my question - is it OK if he did?
 
  • #57
Let me elaborate. Here are the logical options:

1. Musk never tweeted these things. The media made it all up.
2. Musk tweeted "funding secured" knowing it wasn't.
3. Musk tweeted "funding secured" because he thought it was, even though it wasn't.
A. He did this with legal advice.
B. He did this without legal advice.

In case 2, it's pretty much securities fraud. In case 3A, he got very bad legal advice because there was no disclaimer that this was a "forward looking statement". If there were, there would be no investigation and no lawsuit. As CEO, he is ultimately responsible for the quality of the lawyers involved. In Case 3B, making a statement that launched an SEC investigation and apparently multiple lawsuits without checking with the lawyers seems pretty much the definition of erratic behavior.

Cases 1 and 3 cannot be considered "pure genius", which leaves Case 2. Hence the question - is it OK if Elon Musk (or Mother Theresa) does it, but not if some scumbag does it?
 
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  • #58
Vanadium 50 said:
He said funding was secured. Funding was not secured.

And you haven't answered my question - is it OK if he did?
It would not be OK if he broke the law.

But, as Jill Fisch, a business law professor at Univ Penn Law School stated in a Bloomberg podcast on August 17th, 2018;

4:30 ... "I don't think his $420 tweet was necessarily problematic."
...
"The market isn't used to CEO's using Twitter, but they are going to have to get used to it."​

Paraphrased for brevity, as lawyers seem to talk, a lot, IMHO.
 
  • #61
I would love to get stupid high with Elon Musk.
 
  • #62
Tesla CEO Elon Musk has been sued by the Securities and Exchange Commission for fraud, according to court documents filed Thursday. Sources close to the company told CNBC the company was also expecting to be sued, though Tesla was not named as a defendant in the complaint.

Shares of the automaker fell roughly 10 percent in extended trading Thursday.

The SEC complaint alleges that Musk issued "false and misleading" statements and failed to properly notify regulators of material company events. The SEC plans to hold a press conference at 5 pm E.T.
https://www.cnbc.com/2018/09/27/tesla-falls-4percent-on-report-elon-musk-sued-by-sec.html
 
  • #63
I note they also want him banned from being a director or officer of any public company if found guilty.
 
  • #64
Tesla is a company and Telsa is expecting to be sued. What's the problem?
 
  • #65
Aww this administration is adorable!
 
  • #66
SEC offers settlement, Musk refuses, SEC goes ahead with fraud charges, TSLA down 14%.
 
  • #67
https://www.cnbc.com/2018/09/28/son...-have-a-suicide-pact-to-refuse-secs-deal.html
Tesla and the SEC were close to a no-guilt settlement but Musk pulled out at the last minute, according to reporting by CNBC's https://www.cnbc.com/id/105061837.

Under the deal, Musk and Tesla would have had to pay a nominal fine, and the CEO would not have had to admit any guilt, said CNBC's https://www.cnbc.com/id/105061442, citing sources.

But those sources said Musk would have been barred from being chairman for two years and Tesla would have to appoint two new independent directors.

"It was an unbelievably generous deal," said Sonnenfeld, a senior associate dean at the Yale School of Management.

So good, in fact, that former SEC Chairman Richard Breeden said the agency likely sees Musk's and the board's decisions to turn down the deal "as another reckless act by Tesla."
 
  • #68
Tesla board already has 3 too many directors, adding 2 more would make it the most useless, divergent board in history of corporations.
 
  • #69
cronxeh said:
Tesla board already has 3 too many directors

Really? Why is six the perfect number?

cronxeh said:
dding 2 more would make it the most useless, divergent board in history of corporations.

I'm assuming that's a joke, right?
 
  • #70
When you have that many people on your board, reaching a consensus is a non-trivial matter, which makes it an ineffective board.

An optimal number, just like an optimal number of direct reports to have for a manager, is 5-7.

Currently there are 9 members, adding 2 more would make it a very ineffective board.
 

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