“On Friday, the New York Times released an article detailing the process with which Tesla (TSLA) rejected the Securities and Exchange Commission’s first settlement offer, causing its stock to plummet 14%, before going back to the SEC and finally agreeing upon a settlement, about 48 hours later,” Quoth the Raven writes for Seeking Alpha. “This story offers small details to the situation that could be of large consequence to Tesla investors… In fact, the Times reported on Friday that the company rejected the SEC settlement at the very last minute because Elon Musk threatened to quit as CEO. He also apparently demanded that the board of directors put out a statement telling the public that they stood behind Musk and his integrity, as well.”
“As most people know, the board of directors is supposed to be protecting the interests of shareholders and governing the company and its officers accordingly,” Raven writes. “In many cases, I have made the argument that it appears that Elon Musk is the one doing the governing and that the board has been beholden to him, instead of the other way around. This report indicates to me that my line of logic may be accurate. For Musk to be able to simply pull the card of ‘I quit’ any time something happens that he doesn’t agree with is not only poor corporate governance, but sets the stage for immense future volatility between Musk and his board, in my opinion.”
“I think Tesla investors can ready themselves for a new period of volatility relating to this going forward. As most people know, the settlement with the SEC stipulates that Tesla must bring on two independent directors. It also stipulates that Musk must step down as board chairman,” Raven writes. “If the company goes out and selects two independent board members who are fully aware of their fiduciary responsibility and the liability of being a board member, and are truly ‘independent,’ things have a chance to get rockier, very quickly.”
Read more in the full article here.
MacDailyNews Take: Musk has always been eccentric and, increasingly, unpredictable and erratic. He’s now ventured into actionable impetuousness. At times, it’s like watching a slow-motion car wreck.
A company in Telsa’s shape has no chance of competing with German and other automakers who are moving strongly into Tesla’s purview, to say nothing of the potential of mighty Apple entering the market.
Elon Musk’s ultimatum to Tesla board: Fight the S.E.C. or I quit – October 4, 2018
Musk ousted as Tesla chairman, fined $40 million in SEC settlement over fraud charges; will remain CEO – September 29, 2018
U.S. SEC charges Tesla CEO Elon Musk with fraud – September 27, 2018
Tesla shares crash after Elon Musk smokes pot on live web show, exhibits other bizarre behavior – September 8, 2016
Apple hired scores of ex-Tesla employees this year, and not just for its car project – August 24, 2018
Tesla sinks on concerns over CEO Elon Musk’s erratic behavior – August 17, 2018
Doug Field, former Tesla engineering chief, returns to Apple – August 10, 2018
His behaviour has surely made all but the most devoted and deluded sycophants realise Tesla has little chance of sustaining its advantage against growing opposition which shows crass stupidity on his part and a shattering of his veneer of invulnerability. Having read about the near Impractically in real world use of his tubed hyperloop efforts I would be scared shitless if I were an astronaut or indeed responsible space agency, relying upon his hyped space efforts, based on all the evidence we now see of engineering, monetary and apparent mental health issues. Sad and one loves the Maverick, but pehaps we should have known it all looked too good to be true.
Elon Musk, a talented, but delusional and flawed Engineer and Entrepreneur who has an inability to focus on just a few things and carry them through to success.
Telus has yet to produce an affordable electric car after about 10 years of being in business. Just recently Musk admitted that the entry level Model 3 needed to be pulled or Tesla would die because they’d lose too much money on it.
Tesla is supported a a lot of fanboys and institutional investors. An $80,000 car? That is so out of reach for most people. And in my opinion, the cars are ugly, generic, and lack substance. They’re also suspect performance wise: try cornering hard in a Model S. I see the Model S as a modern day boat.
This is reality: the big automakers are coming, and in the next 1-2 years, long-range, affordable electric cars will flood the market.
The Hyundai Kona just launched. A crossover SUV at $35,000 that goes real world 400-450 km on a charge.
Tesla cannot compete.
Exactly right, Tesla’s alleged technology lead has now gone.
They had 3 years and blew it. Every car manufacturer is designing electric vehicles that will start to be for sale next year, plus those companies have loads of factories, can make millions if they desire too.
For example the Jaguar I-pace is coming out early next year and that’s a model 3 killer.
Tesla is done, sell the shares before next year to you’re gonna lose a lot of money.
The iPace is a $70k-80+k car. Nice finishes but to get autopilot like features you are at 80K. I keep looking and Tesla still offers the best value for a performance electric car. If you really want frugality a 2-3 yr old Nissan Leaf is the way to go. However, it seems like an economy box car with an electric motor and limited range. BMW i3 -45K for a car limited to around town. Will Tesla still be in business? Who knows. I am willing to chance it now rather than wait another 2 years for a car that is out of my reach.
The winner of this race will be the first company to make a beautiful electric car, with a very long range that’s priced under 30k
That will be Toyota.
Quote on his admission that the entry model 3 needs to be pulled?
I disagree that the cars are ugly or lack substance. I was given a ride on a coned parking lot course and the S corners quite well at high speeds (although the tires definitely struggle to move the weight). From inside, the car feels so open with all the glass, but at the same time is one of, if not the, safest cars on the road. That’s tough to beat.
Also, I think a lot of Tesla haters that think other manufacturers are going to easily transistion are forgetting about the supercharger network that they’ve been building over the last decade. The network is over 10,000 superchargers now. That’s a huge value proposition for any electric car buyer that is cross shopping. Long range is not that useful without something like a supercharger network.
What you don’t get its that there are other companies making the infrastructure that will charge all makes of electric cars, whereas the Tesla chargers will only charge Teslas.
This is a massive strategic flaw in Tesla’s plan. When there are many makes of electric cars on the road everyone will need adaptive chargers that can charge any make or model of vehicle.
“Tesla isn’t shipping its $35,000 Model 3. That’s a problem if Elon Musk wants the company to appeal to a mass market.
Musk says if Tesla ships the promised affordable version of the Model 3 first it will “lose money and die.””
It’s interesting…I remember 20 yrs ago when people were saying similar things about Apple. Overpriced, tiny marketshare, they blew the lead, loved only by fanboys, going down the tubes, lost the battle to Microsoft, Steve Jobs had great ideas but was terrible leader… Gosh, why don’t the just break it up now and give the money back to shareholders?
SpaceX is NOT lead by Musk. It’s lead by Gwynne Shotwell. Yes, Musk supplies the “big vision” and is the face and name that most people associate with SpaceX, but the person getting the job done is Gwynne. She really is the unsung hero of SpaceX. Those inside the industry at medium and high levels know this. It is unfortunate the public does not.
I first met Gwynne back right after the turn of the century in a booth at a convention when SpaceX was little more than a dream — back in what Gwynne called her “booth-babe days” (Gwynne, If you see this or hear about this post, FYI, you were never an air headed “booth-babe”.) I’ve been impressed during every interaction I’ve had with her since.
SpaceX has gotten further, faster than any space company since NASA in the 60s — that includes any country or company you want to name. In fact, I’m putting my money and reputation on the line with Gwynne and will be launching three large satellites on SpaceX rockets. That’s about a $900 million bet. And my insurance brokers and underwriters are backing that bet. I’m not concerned in the least.
What Tesla’s board needs to do is find a Gwynne Shotwell equivalent for Tesla. Let Musk be the public face of Tesla, and let him make the big, visionary statements. However, Tesla needs someone like Gwynne to run the show and run it well!
May i ask what business you are in and what your satellites are intended for ?
Almost a Billion!!! that is a Huge bet!
Musk is a genius, and the entire planet has benefited from him being born here on earth now.
He brought mainstream acceptance of Solar power. The beginning of the Electric car industry that he got going when no other company wanted to try.
He brought back the dream of space travel. –and let’s not forget PayPal.
I am not big enough to Judge Elon Musk’s failures. In my book, he is a modern day Tony Stark. (So what if Iron Man is a bit eccentric).
I am glad Elon was born, and I hope his “craziness” continues because the whole world has benefited from him being born.
True ! but managing a company requires a whole slew of skill sets besides vision and charisma!
The only thing that can save Tesla is a buyout by a big auto manufacturer
Totally agree, Tesla won’t be able to compete with a whole industry.
Next year is make or break for Tesla, they’ve never made a profit, only have one factory and need billions in investment to compete on a global scale.
What a rationale idea here on MDN.
But what is going to happen first is that BMW, Volvo, Mercedes & Portia will have their electric vehicles out first and then within 6 months, Tesla’s share price will fall.
At that point, GM or FORD will come for “lunch.”
“The goal of Tesla is to try to act as a catalyst to accelerate those sort of normal forces. The normal sort of market reaction that would occur. It’s very important that we accelerate the transition away from gasoline for environmental reasons, economic reasons, national security reasons. It’s very very fundamental.
I think we helped set the ball in motion. Now what is important is to continue the momentum. People that really believe in sustainability, that really believe in the electric car revolution, people like yourselves are very important to the success of Tesla, and to the success of electric vehicles in general. There are still many people out there that don’t believe in electric cars, they think nothing is going to happen. We have to overcome that negativity, otherwise it’s going to be way too slow, and there will be tremendous damage to the environment as a result. Word of mouth is super important, it’s vital, and we need you to be able to go out there, and talk to people that you know and say ‘Hey, electric cars are ready.’ It’s time to make it happen. If the big car companies see that our sales are good, and that we are actually able to take a little bit of market share, I mean, we’re a tiny company, so a drop in the bucket, but if they see that people are buying these cars, then they will have no choice but to conclude that electric cars are the right way to go, and that will accelerate the transition to sustainable transport.
We are just going to keep making more and more electric cars, and driving the price point down until the industry is very firmly electric. Until like maybe half of all cars made are electric or something like that. Which is not to say that we expect to make half of all cars. The car industry is very big. It’s not as though there is one company to the exclusion of others. There is like a dozen car companies in the world of significance. The most that any company has is approximately 10% market share. It’s not like somebody comes up with a car, and they suddenly kill everyone else, it’s not like that.
We want to just have that catalytic effect until at least that occurs. I think the point at which we’re approaching half of all new cars made are electric, then I think I would consider that to be the victory condition. The faster we can bring that day, the better.”
source: “Elon Musk: The Unauthorized Autobiography”
There are people out there that believe in the future of electric cars, but don’t believe in the future of Tesla.
Tesla isn’t the future of electric cars…
If by ‘eccentric’, you mean he’s always been a delusional sociopath, then yes, yes he has. His quitting would be the best possible thing for that company.
I’ve always considered Musk to be another Steve Jobs—if Steve were high on crystal meth.
Why can’t Cook threaten to quit Apple?
I guess that no one remembers that SJ in his first life at Apple had a terrible reputation for recklessness and temper. His relationship with the board was definitely not easy.
Musk is the same way – thinks different and sometimes speaks inappropriately. Would you rather he be boring and not come up with the best US-designed car or not have rockets that can land themselves.
How comparisons between Musk and SJ fail:
Apple under Steve Jobs always produced a profit. Tesla under Musk has never produced a profit.
Says it all!
Musk is no Jobs.
Thank Jobs that we have a liberal gay guy from Texas democrats that was the Jobs right and left arm during the Messianic Times as our leader and Not The Jobs Forbiden BoZo! or Bozos!! 😆
i love Elon Musk’s vision. his boldness. his always pushing for greater heights.
Tesla is precisely the kind of company that requires an Elon Musk type of leader.
i hope that the Board somehow takes a middle stance and keeps Musk and also elects a couple of independent Board members as well.
Tesla is Elon Musk warts and all. Without him, it’s just warts.
This is pretty fun to watch until Game of Thrones final season is released.
I agree, nothing like seeing a hyped up, ego centric, delusional non visionary sociopath crash and burn.
Get the popcorn ready…
Maybe what MDN say is true, I sure as heck wouldn’t want to compete toe to toe with the “big boys” of the auto industry, but….
1) Tesla is the largest American car company created in the last 70 years.
2) Tesla has shown everyone that an electric car is “just fine” for 90% of 90% of the people’s needs.
3) Tesla has a network of “superchargers” accross this country.
4) Tesla has a huge battery factory. Maybe they can make batteries for others.
The real question is can they produce a number of cars and be profitable. What is that number per year? 200k 400k 1m? I think the number for Tesla is between 400 and 600k. Way more than they produce now but just a fraction of what the big boys produce.
Steve Jobs once said about Next “the world doesn’t need another 100 million dollar computer company”. About, Next he was right. Does the world need another car company that produces 600,000 cars per year? Time will tell. As for me, I always wanted a Next computer but I never got the chance. Now, I like Tesla cars but there is nothing now that indicates I’ll ever have the chance to buy one. My current vehicle combination of a Prius and a Tacoma fits my needs 100%. Both of them together cost 2/3rds or less than a Tesla. Both are made by the biggest of the big boys.
When someone threatens to quit there is only one appropriate response: “Resignation accepted!”
Everyone is replaceable.
No one is indespencible and blackmailing the board only leaves them to do one thing… to sack him.
Musk is an emotional train wreck, like the crap he came out with on twitter accusing one of the cave rescuers of being a paedophile all because they wouldn’t use his pathetic submarine in reducing the kids from the cave.
I’m glad to say that cave rescuer, who is a hero is seeing Musk.
Are MDN owners short on Tesla? Beside the fact that it has nothing to do with Apple, why on earth would you publish news from a know fake news site owned by short sellers who publish at best half truths stories to make targeted stocks tank? This is raising serious doubts about your integrity.
MDN is so desperate for advertising clicks that they have resorted to cheap attacks, politics, controversial personalities, and so forth. Pipeline Cook isn’t helping, but lazy MDN produces nothing but froth. No substance here whatsoever.
Why is this story here?
Two words: Project Titan.