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

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

#121

Post by aaron695 » Wed, Oct 03, 2018, 8:30 AM UTC

chipotle_coyote wrote: post #26

kirillzubovsky wrote: post #8

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,…

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 upsid…

> it'd be funny if I said we were going private at $420 a share, because 420"?

Google bid at Pi, Meissel-Mertens constant and Brun's constant. https://www.theguardian.com/technology/2011/jul/02/google-pi...

Just because you don't understand the upside doesn't mean there isn't one.

The pedophile thing was a mistake I'd agree, but I'd bet you don't know the full story, but maybe you do.

It still stands there would be no Tesla without Elon. Take it or leave electric cars in the minds of novelists.

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

#122

Post by slivym » Wed, Oct 03, 2018, 9:03 AM UTC

geezerjay wrote: post #105

GW150914 wrote: post #25

Earlier quoted context omitted.

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 crushi…

> 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 Tes…

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.

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

#123

Post by desdiv » Wed, Oct 03, 2018, 10:08 AM UTC

cm2187 wrote: post #113

r00fus wrote: post #70

Earlier quoted context omitted.

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

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

#124

Post by konschubert » Wed, Oct 03, 2018, 10:55 AM UTC

tehlike wrote: post #41

kirillzubovsky wrote: post #8

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,…

Elon musk brings entropy, with entropy comes higher reward.

No.

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

#125

Post by konschubert » Wed, Oct 03, 2018, 10:58 AM UTC

starbugs wrote: post #81

Animats wrote: post #75

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 bee…

> 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…

> Innovation cycles have become much shorter.

This is constantly being repeated but I doubt it is true

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

#126

Post by apatters » Wed, Oct 03, 2018, 11:07 AM UTC

adventured wrote: post #51

apatters wrote: post #39

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 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…

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.

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

#127

Post by starbugs » Wed, Oct 03, 2018, 11:49 AM UTC

konschubert wrote: post #125

starbugs wrote: post #81

Earlier quoted context omitted.

> 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…

> 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.

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

#128

Post by dnadler » Wed, Oct 03, 2018, 11:50 AM UTC

geezerjay wrote: post #101

dragosmocrii wrote: post #85

Earlier quoted context omitted.

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.

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

#129

Post by village-idiot » Wed, Oct 03, 2018, 12:02 PM UTC

pbreit wrote: post #44

village-idiot wrote: post #20

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?

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

#130

Post by bjl » Wed, Oct 03, 2018, 12:09 PM UTC

imhoguy wrote: post #71

dragosmocrii wrote: post #35

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.

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.

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.