-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Open letter to Elon
- Thread starter theBulgar82
- Start date
tinm
2020 Model S LR+ Owner
I will give you my honest opinion as a medical professional turned software developer/entrepreneur.
You do not have a revolutionary idea. You did, however, identify a pain point for Tesla owners and are seeking to address it. I think that is an admirable business strategy.
There are plenty of people who do big things and everyone calls them crazy. What separates them is that their ideas are unique, revolutionary, and supported by their ability to collect a talented team and lead them towards a shared vision.
What you want to do is rent cars. That does not require you to purchase 10 million dollars of cars in advance and that is a terrible business decision if it is true.
Unfortunately, that massive mistake in handling your money and what appears to be some sense of grandiosity regarding an idea as old as the model T means that you should probably talk to someone about your ideas about yourself, your money, and how you are feeling about life right now.
I'm just on a forum and this is a very difficult conversation to have here but I do hope you are ok. I hope we are wrong. It is good to feel good. It is not good to feel so great that you make big mistakes financially, legally, and in your relationships.
I hope you don't take this as criticism. I wholly admit I could be wrong but I hope you also consider talking to a professional and proving me wrong. :-D
NikeWings
Active Member
Thank you Vigilante but maybe you need to check out first page of the WSJ and read up on the financial issues Tesla is running into. So the last thing TESLA and Elon would like to do is miss out on a 10M sale.
In case you do not have access to the public media here is a copy:
Elon Musk and the Terrible, Horrible, No Good $779 Million Day
By David Welch, Dana Hull and Tom Metcalf
- He has a lot riding on his plan to merge Tesla and SolarCity
- A high-risk taker, ‘his skin is completely in the game’
Elon Musk has a lot riding on his plan to merge Tesla Motors Inc. with SolarCity Corp. -- including a big chunk of his $8.3 billion fortune.
He may be better off just giving up on the debt-ridden solar-panel installer and focusing on turning Tesla into a profitable enterprise. But Musk has a long history of throwing his money after his grand visions, like weening the world off fossil fuels and colonizing Mars, sometimes running very low on cash and coming close, by his own admission, to personal bankruptcy.
“He’s got guts, I’ll give him that,” said Ross Gerber, chief executive officer of Gerber Kawasaki Wealth & Investment Management, which has a $5 million position in Tesla and has recently been selling shares. “He really pushes it out on his companies, but Elon could implode.”
As it is, only about 4 percent of his net worth is tied up in SolarCity, of which he’s the chairman and largest shareholder. The company has been burning cash at a prodigious rate and, according to regulatory filings, is getting closer to defaulting on its $3 billion in debt. If the proposed acquisition by Tesla doesn’t come to pass, and SolarCity burns out, Musk will take a relatively minor hit.
He suffered one Thursday, when his fortune, on paper, shrank by $779 million, according to the Bloomberg Billionaires Index. That was due to two factors: drops in the companies’ stock prices; and Wednesday’s regulatory filing showing he has put up an additional $489 million of his Tesla and SolarCity stock as collateral to secure personal borrowings. The pledged shares are stripped out of his total net worth calculation because they’re not immediately available to him. The borrowing is for personal liquidity; he doesn’t even accept the $37,584 minimum-wage salary Tesla is required to pay him.
The bigger threat to Musk’s bank accounts would come from SolarCity dragging down Tesla in a combined company. He has half of his money in the electric-car maker, of which he is CEO; about 46 percent of his value is in his closely held rocket-launch company Space Exploration Technologies Corp. (SpaceX, as its known, suffered a setback Thursday when its Falcon 9 rocket burned up on a launch pad, destroying itself and an Israeli communication satellite.)
Though the prospect of a merger has been controversial -- with some analysts and investors viewing it as a costly bailout of SolarCity -- Musk has said he is as committed as ever to seeing it through. He’s said customers will benefit from one-stop shopping and installation of solar panels, energy storage and electric-car charging. Many shareholders are behind him.
“A lot of the longer-term investors, while they aren’t extremely enthusiastic about the SolarCity deal, still stand by Elon and what he’s trying to achieve,” said Ben Kallo, an analyst with Robert W. Baird & Co. “Typically investors like to be paired with management teams that have big stakes in their companies.”
Tesla made a bid to acquire SolarCity in June, and a two-person committee of the SolarCity board approved the all-stock offer, now valued at $2.3 billion. The Securities and Exchange Committee must review documents related to the offer that shareholders will receive, to ensure there’s adequate disclosure and general compliance with securities laws. Then the matter will be put to a vote by shareholders of both companies.
More Stock Sales
In a regulatory filing Wednesday, Tesla said that in the first six months of the year, it burned through $611 million in cash, and SolarCity went through $433 million. That probably means more stock sales, which will dilute existing holdings, said Salim Morsy, a Bloomberg New Energy Finance analyst.
The filing also revealed that Musk suggested to his cousin, SolarCity CEO Lyndon Rive, sometime in February that they combine their companies, and that the Tesla board was briefed on the idea on Feb. 29. That means Tesla directors knew about the possibility of a union when the company sold $1.4 billion in stock in a secondary offering in May, but didn’t share that information with buyers.
Because the board decided not to proceed with an evaluation of a deal in February, the company was probably in compliance with securities laws, according to James Cox, a professor at Duke University School of Law. It wasn’t until May 31 that Tesla directors told management to assess the rationale of such an acquisition.
Risk Tolerance
The February discussion between Musk and Rive was described as “high-level, conceptual,” with the two talking about possible product offerings. It doesn’t specify whether that conversation was before or after Musk’s Feb. 12 purchase of almost 570,000 shares of SolarCity for an average price of about $17.56, which brought his holdings to about 21.8 million shares.
Musk has a famously high tolerance for risk. He poured the $180 million he made from the 2002 sale of PayPal, which he co-founded, to EBay Inc. into Tesla and SpaceX. By 2008, both were running on fumes, with Tesla hemorrhaging money and SpaceX’s first three rocket launches having failed to reach orbit. But in December of that year, after SpaceX’s fourth flight was flawless, NASA announced it had been awarded a contract worth as much as $1.6 billion to ferry cargo to the International Space Station. Tesla closed a critical funding round late on Christmas Eve, hours before it would have gone bankrupt.
“There is no level of risk that is too high for Elon Musk,” said Mike Ramsey, an analyst at Gartner Inc. “That’s absolutely clear. His skin is completely in the game.”
In June, Musk called marrying Tesla and SolarCity a “no brainer.” Back in 2013, he put a telling post on Twitter about his dedication to sticking it out at Tesla: “Just as my money was the first in, it will be the last out.”
Related tickers:
711339Z US (Space Exploration Technologies Corp)
SCTY US (SolarCity Corp)
TSLA US (Tesla Motors Inc)
To contact the reporters on this story:
David Welch in Southfield, Michigan, at [email protected];
Dana Hull in San Francisco at [email protected];
Tom Metcalf in San Francisco at [email protected]
To contact the editors responsible for this story:
Jamie Butters at [email protected]
Anne Reifenberg
Recommended Stories Musk Talked Merger With SolarCity CEO Before Sale of Stock (1)
Seeking Alpha: 'Oops' - Tesla Bankers
Barron's: Tesla Motors: It’s Not Just SpaceX That’s Blowing Up Today
Business Insider: Elon Musk’s bankers made a mistake on the SolarCity deal, but Tesla went ahead with it anyway
Investors Betting Against Tesla’s SolarCity Deal: Chart
Tesla’s Musk Says ‘Major Improvements’ to Autopilot Coming
People Lyndon Rive (SolarCity Corp)
Ben Kallo (Robert W Baird & Co Inc)
James Cox (Duke University)
Ross Gerber (Gerber Kawasaki Inc)
Topics Business News (BUSINESS)
Who's News - People (WNEWS)
Feature Stories, Columns & Commentary (ALLFEA)
Alternative Energy (ALTNRG)
Aerospace & Defense (ARO)
Auto Parts (AUP)
Click here to view story in Bloomberg
#2 out of 100 - Delivery taken @ Las Vegas shop. Kudos to Lynda @tesla for doing some magic to get it done in a day. I 24h in Vegas and had to have my P90D. Code of this car is ZEBRA - Comes from the mascot Middlesex School, Concord, MA. BTW I wrote Kevin Systrom with whom I took my first C++ class at MX. He is ignoring me too 
Vigilante would probably suggest a Cease and desist from Instagram too...
Excuse my appearance, but I have been on 2-3h of sleep on average for the past 3 weeks. Right now on JetBlue from LAX to JFK after securing a partnership with Adobe. We are set to start on October 1st and first city we will serve is Washington, DC.
AGAIN THANKS TO LYNDA. If any of you want to get things right, talk to her. I am glad she left her law enforcement job and joined the TESLA family.
Lynda Florenzen | Delivery Experience Specialist
Las Vegas Delivery Hours | Monday –Friday 9am-4pm, Closed Saturday and Sunday
Tesla Motors Las Vegas | 6260 West Badura Avenue, Las Vegas, NV 89118
p. 702.914.6500 option 4 | m. 949.324.8230 | e. [email protected]
Roadside Assistance and Service Support 24-hours: 877.79. TESLA
Vigilante would probably suggest a Cease and desist from Instagram too...Excuse my appearance, but I have been on 2-3h of sleep on average for the past 3 weeks. Right now on JetBlue from LAX to JFK after securing a partnership with Adobe. We are set to start on October 1st and first city we will serve is Washington, DC.
AGAIN THANKS TO LYNDA. If any of you want to get things right, talk to her. I am glad she left her law enforcement job and joined the TESLA family.
Lynda Florenzen | Delivery Experience Specialist
Las Vegas Delivery Hours | Monday –Friday 9am-4pm, Closed Saturday and Sunday
Tesla Motors Las Vegas | 6260 West Badura Avenue, Las Vegas, NV 89118
p. 702.914.6500 option 4 | m. 949.324.8230 | e. [email protected]
Roadside Assistance and Service Support 24-hours: 877.79. TESLA
Attachments
It doesn't appear you read the article. It doesn't talk about the financial issues of Tesla. It talks about market representation based on investor sentiment surrounding the SolarCity deal, and how that affects Elon Musk's net worth. That, and his collateral borrowing. If I missed something, please let me know.
Many people confuse financials with market sentiment. Sometimes they do even correlate!
I am getting professional help and my dad is great not because he supported me till I was 16, but because he thought me how to connect the dots, trust and don't settle.
Similar threads
