Elon Musk’s threats to quit as Tesla CEO are a red flag

“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.

SEE ALSO:
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

39 Comments

  1. 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.

    1. So right!

      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.

  2. 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.

    1. 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.

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