TSLA Market Action: 2018 Investor Roundtable

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Why $200B in ten years when $1T this year would do so much more? That's what I don't get. He has to have it (which I don't begrudge him), but on his timeline, not ours? Certainly, the legitimate opportunties are extremely few if any, but when they are available, why not take them? Perhaps for him, in a place of comfort, ten years is soon enough.

I must have missed their enumeration someplace, not that I need to see them.

Yes, he is able to do things on his timeline because his life is up to him. You can support, ignore or work against. That would be up to you.

Also Elon has been remarkably consistent in his overall goals for the last 20+ years.

More recently he has been very clear on what he plans to do with any wealth creation from Tesla.

I believe him. Do you?

 

[ls7corvete]

Yes, he is able to do things on his timeline because his life is up to him. You can support, ignore or work against. That would be up to you.

Also Elon has been remarkably consistent in his overall goals for the last 20+ years.

More recently he has been very clear on what he plans to do with any wealth creation from Tesla.

I believe him. Do you?

I believe him, yet I doubt he can scale his other goals much faster even with a large lump sum. A consisent amount over the next decade sounds perfect, should be to mars by then.

 

[CorneliusXX]

I’m long, but I like that you can’t tell. Equally hated by bulls and bears alike. What a dream come true.

That's usually a sign of a deal well struck

 

[ValueAnalyst]

I'm sorry, can someone catch me up real quick? What's the main argument against Elon's compensation package?

The proposed comp plan does not protect shareholders for a number of low probability but highly unfair outcomes. For example, if Tesla’s market cap doubles in ten years, which would likely be a sub-index return, and revenues reach $20B, then Elon walks away with $1B while shareholders get sub-index return for ten years. This is just one example.

I proposed either or both of the following adjustments:

1. Put a time limit to market cap milestones; and/or
2. Weight the number of shares awarded to higher market cap milestones.

These simple adjustments would better align the interests of shareholders with those of Elon.

 

[ValueAnalyst]

Some people think if Elon puts his life blood into growing TSLA tenfold and we all get obscenely rich, it isn't enough and he shouldn't get the few bucks associated with achieving those goals, even though it will go towards doing more impossible things.
And I guess some think TSLA will do just fine without Musk, and he has enough so why bother.
Or maybe I don't understand the issue.

One should be able to articulate the other side’s argument.

 

[jbcarioca]

One should be able to articulate the other side’s argument.

I think this is the wisest post you have ever made.

 

[ValueAnalyst]

I think this is the wisest post you have ever made.

Learning by osmosis, or just getting older by the day.

 

[Reciprocity]

The proposed comp plan does not protect shareholders for a number of low probability but highly unfair outcomes. For example, if Tesla’s market cap doubles in ten years, which would likely be a sub-index return, and revenues reach $20B, then Elon walks away with $1B while shareholders get sub-index return for ten years. This is just one example.

I proposed either or both of the following adjustments:

1. Put a time limit to market cap milestones; and/or
2. Weight the number of shares awarded to higher market cap milestones.

These simple adjustments would better align the interests of shareholders with those of Elon.

If he doesn't exceed the low targets, something went terribly wrong. I realize the ramp has been tough on some folks beliefs, but have faith. This stuff is really hard and frankly most of it's borderline impossible. To me the market cap numbers are the simplest because the growth will be there. Over the next 10 years I'm less worried about profits and more concerned with time to market for future products because Tesla needs to capture massive amounts of market share while they have a lead. I believe Tesla will always hold an edge on the top end of the market, but they do not yet own that market and will lose it if they cannot deliver.

Elon doesnt care about large amounts of wealth as much as he does care about control. The kind of control that would allow him to take the company private at some point. Tough I don't that will happen, it's a possibility if being public makes the mission measurably harder then being private.

I would not do anything to discourage Elon from wanting to stay and finish the job. I understand VAs concerns but if that comes to pass, there are much bigger problems and moats will have been squandered and market share left on the table. China could be an issue if Tesla cannot a manage a deal there for a Tesla only manufacturing plant.

 

[jhm]

Over the next 10 years I'm less worried about profits and more concerned with time to market for future products because Tesla needs to capture massive amounts of market share while they have a lead. I believe Tesla will always hold an edge on the top end of the market, but they do not yet own that market and will lose it if they cannot deliver.

I totally agree with this. Tesla has a massive pipeline of new products past Model 3: Solar Roof, Semi, Model Y, Roadster, and more. This pipeline is essential to being able to sustain 50%/y growth in revenue for more than just a couple of years. It's a little hard to know how fast each product will be scaled and how far. But the diversity of the portfolio gives Tesla alot of options to be opportunistic as markets emerge. So right now Model 3 is the big growth driver. In a couple of years most of that explosive potential will be realized. So what comes after that? Powerpacks and Powerwalls may become an explosive growth opportunity, but it is hard to tell when the world will catch storage fever. Or may be oil prices will remain high and trucker will be crying out for relief from pain at the pump, and the Semi will be a sensational hit. So all these products in the pipeline have their moments in the sun, but the precise sequencing of events is hard to know in advance. This is why investors need to chill and simply roll with the punches. Tesla is building out its capabilities and has a bigger product pipeline than it can implement on a precise timetable.

 

[Intl Professor]

Learning by osmosis, or just getting older by the day.

It is said Buddha said: "All I know is from my own experience."

 

[Lessmog]

It is said Buddha said: "All I know is from my own experience."

And you know this how?

 

[Intl Professor]

And you know this how?

Of course, in the same way.

 

[EnzoXYZ]

No need to wonder, he was embarrassingly and consistently wrong.

If he in fact has that many shares and at that kind of leverage it’s no wonder he is enthusiastic bull. I too would be trying to pump the stock price up.
Think of all the ultra bears that publicly disclosed a short position. They act opposite of 007.

 

[dmckinstry]

100 million a year compensation over 10 years ? But with the goals provided well worth the expense, I voted 'yes'.

Chicken feed (or is that mouse nuts?) compared to what some of the legalized criminals get. Definitely yes. Elon is trying to accomplish positive changes for humanity and all the planet. One billion a year with an average increase in share price of about 50 billion in market cap a year would be worth it, if he can accomplish it. Of course, most the long term bulls, expect even more than that.
Now I've got to find out why I only got proxy notices for my Scottrade account and the Traditional IRA in TIAA, and not the Roth IRA in my TIAA account.

 

[avoigt]

The proposed comp plan does not protect shareholders for a number of low probability but highly unfair outcomes. For example, if Tesla’s market cap doubles in ten years, which would likely be a sub-index return, and revenues reach $20B, then Elon walks away with $1B while shareholders get sub-index return for ten years. This is just one example.

I proposed either or both of the following adjustments:

1. Put a time limit to market cap milestones; and/or
2. Weight the number of shares awarded to higher market cap milestones.

These simple adjustments would better align the interests of shareholders with those of Elon.

Just MHO: if the market cap doubles in 10 years we see a 100% gain of the SP or 10% p.a.. The average stock market long term performance is to be found between 6 and 8% p.a.

So even in that indeed negative scenario most of us don't expect to happen shareholders would get compensated above market average.

 

[dmckinstry]

I was thinking the same exact thing today.

My shares aren't for sale. Well, if he offers 4000 a share? OTOH, if all other share holder were out of the game, he could probably accomplish his goals more quickly.

 

[ValueAnalyst]

Just MHO: if the market cap doubles in 10 years we see a 100% gain of the SP or 10% p.a.. The average stock market long term performance is to be found between 6 and 8% p.a.

So even in that indeed negative scenario most of us don't expect to happen shareholders would get compensated above market average.

100% return in 10 years translates to 7% annualized return, and not 10% per year.

Also note that the volatility of returns, a measure of risk as defined by portfolio managers, of the overall index is a fraction of that of TSLA.

 

[Krugerrand]

It’s easy to pick just one loser to fit your narrative. You’re ignoring the many companies that will come out with competent electric cars in the next half decade or so. Tesla is among the winners. Arguing about a loser is like arguing about how many bread crumbs each winner will make, longer term. Which is the purpose of this forum. Good job!

Do you know how many times we’ve heard ‘you’re ignoring the many companies that will come out with competent electric cars in the next half decade or so?’ No, of course you don’t and neither do we since we’ve lost count in the last decade or so.

Wake me up when they actually arrive, can be purchased in quantity and are actual head to head competition with Tesla vehicles. Themis means they better have similar performance metrics, aesthetics, pricing, options, charging rates, charging network, OTA updates, full home energy products/integration etc... Only then will we talk about ‘competition’.

 

[jhm]

<FANTASY_MODE=ON>
CEO package enables Elon to gain 33% stake in Tesla by 2028. SpaceX LEO wireless becomes cash cow, enabling SpaceX to buy up 20% of Tesla upon any weak valuation. So by 2028 Musk has controlling interest in Tesla and absorbs Tesla into SpaceX upon any weak valuation by the market. It was always supposed to be one company.
<FANTASY_MODE=OFF>

 

[Bobfitz1]

How can anything be less reliable than a coin flip (let alone significantly so)?

If decisions were all binary Yes or No, then flipping a coin, over time, should mean you'd make the correct decision half the time.
But if those decisions are made by a person whose thought processes were weak or misdirected, that persons decisions could easily be wrong far more often than 50%. Mark Spiegel being a good example.