Tesla CEO Elon Musk put out a straightforward proposal yesterday — hey, why not avoid much of this misleading media nonsense and financial skullduggery and just go private? Many Tesla bulls who closely follow the company and its CEO were a bit shocked, but then quickly understood the rationale. Many of us see it as the best move for Tesla, even if it means that we lose out as small retail investors (lack of liquidity is a challenge for us and not having the ability to slowly accumulate shares is another downside).
A few insightful commenters actually raised this privatization possibility in recent months and had screenshots or links to prove it — with the smears so loud and so broad, they were searching for potential solutions and landed on privatizing the company as a top one. Before Elon’s tweets yesterday, these armchair speculators were largely brushed off by those of us who thought Tesla going private was unrealistic at this stage*.
Apparently, though, professionals across the major media landscape were not only shocked, but also infuriated, indignant, and accusatory. What’s new?
I kept receiving reports of absolutely furious analysts and hosts on CNBC, MSNBC, Fox, etc. Here’s a great summary from one of our top commenters, John Moore:
“I just watched another guest on CNBC foaming at the mouth and lying about Tesla. Betsy Atkins. Just called Elon a trainwreck. I ran it back and these are quotes: No board oversight. They will be investigated. Odd. Cowboy CEO. Baited analysts. Friendly fire. Class action lawsuits. SEC investigations. Can’t raise the money. Missed shipments. High turnover. Operations are a mess. Making cars in a tent. Whistleblower. Lying about raising the money.
“These people are incredible. They are just overtly furious.
“So I just bought more. My guess? He DOES have the money. They WILL go private, for somewhere between $450 and $500 a share.”
John summarized the same kind of response in another comment:
“Jeffrey Sonnenfeld was on CNBC today, right after the announcement. He was having a tantrum. He went on and on for ten minutes. He was apoplectic. Just in a rage. It was very strange. He sounded like a trapped short.”
I’m honestly not entirely clear why so many people are furious. Were they simply shorting TSLA? Do they really think this is all a lie and Elon is crazy and/or defrauding people? Do they just not like their world views regarding pubic companies and the market getting busted up? (They don’t seem upset that Koch Industries or Cargill are private companies.) I can’t really say, but I can say that they don’t seem to understand Elon Musk and why he’s fed up with them, short-term thinking, financial games on Wall Street, and bone-headed questions from supposed experts.
However, the piece that actually got me to write this article was an unfortunate editorial from one of my favorite media outlets, The Guardian. It was misleading, lacking in context, and seemed to make it obvious that even people like the thoughtful author who wrote it have been sucked into a deep, broad smear aimed at turning a wonderful success story into a disaster. The great irony: the writer, James Ball, authored a book titled Post-Truth: How Bullshit Conquered the World. My Lord — the irony.
Ball is eloquent as well as colloquial, which means he’s likely to sway many a reader, but he is lacking in context and understanding, and it seems he hasn’t put in the responsible legwork a writer of that influence should put in. His opening line is a smear about Elon looking “bored.” Goodness — Elon is anything but bored. He then compares Elon to a “teething toddler.” Does anyone really wonder why Musk has been responding more and more to horrible media smears of him and his companies? Ball then throws on the insinuation that Musk is acting like “an unemployed 4chan dweller,” which is something that “is incomprehensible given he is the founder and CEO of two companies together valued at around $100bn (£77.7bn).” It’s only incomprehensible if you don’t understand what you’re writing about — which is clearly the case with Ball.
I could go on — that’s just part of the opening paragraph — but why waste my time? The problem is that this inane response — questioning Elon Musk’s mental stability and acting bewildered that he’s the head of two multi-billion-dollar companies (instead of trying to understand and explain why Elon wants to take Tesla private) — is precisely the kind of thing that has pushed Elon to this point. He’s fed up with the nonsense.
Now, even if I could work with Elon to offer him some calming exercises and help respond to bull**** articles so that he doesn’t have to, the point is clear — all of these unnecessary attacks are smearing the Tesla brand. They are playing right into the hands of oil companies and auto companies that have been funding misleading disinformation campaigns aimed at slowing the adoption of clean electric transport. (This is not an unfounded conspiracy theory — multiple instances of this have been revealed.) The Guardian, which is known to respect climate science and support climate action, is doing the work of the largest polluters on the planet. The irony returns.
Look, I get it — Ball isn’t equipped to analyze Tesla’s finances or the validity of its business plan and he isn’t particularly interested in trying. But he’s blatantly missing the points that Musk, his staff, and his top followers have repeatedly tried to make clear to people. No, Tesla’s isn’t in a financial crisis. Production has been delayed by bottlenecks here and there, but the Model 3 is now crushing the competition in the luxury car market (a high-margin segment of the market) and is now actually the 7th or 8th best selling car in the United States. That is not a sign of a company on the verge of collapse.
Ball also misses the point that Saudi Arabia wanted to invest billions of dollars into Tesla and Elon Musk ignored the overture. That’s not the sign of a company in need of financing.
Instead, like many others, Ball floats the idea that Elon Musk was joking about potentially taking Tesla private. Again, he doesn’t understand Musk well enough to understand it’s not a joke, not a lie, and not a smoke and mirrors act. He also doesn’t understand that Musk is not a naïve idiot who would commit an SEC violation like that, which is a heavily pushed narrative smearing Musk that Ball has apparently digested.
The ending of Ball’s article is as misguided and misleading as the first. He writes:
“In normal circumstances, CEOs who refuse to live by those standards get ousted – but thanks to the tech boom and the veneration of founders, Musk is chairman, CEO, and largest shareholder – and everyone else is riding the tiger. They may have no choice but to hang on or lose their money – but how many now are hoping they could get off?”
Tesla’s board has heavily supported Musk all along the way because Musk delivers. Under Musk, Tesla executes. The man is a genius who mixes financial expertise, expertise in various fields of engineering, marketing and consumer expertise, and kind-hearted humanity. If Musk left, the stock price would tank, because people are largely betting on Musk’s consistent ability to “achieve the impossible.” The answer to Ball’s question “but how many now are hoping they could get off?” is sitting on the stock market right now — the stock price has rocketed up to $370/share. It was around $300 a week ago.
The only reasons it isn’t higher are because 1) people like Ball don’t understand the company, don’t understand Musk, and don’t understand that he’s not joking, and 2) there are many people who do understand Musk and Tesla and want to do everything they can to stop the rEVolution.
*We did write a story in March (on my birthday actually) about companies that might be interested in buying Tesla if shit totally hit the fan — or, as the case may be now, I guess these are companies that might be interested in buying a sizable stake in a private Tesla. We could find out soon. We got a bit of criticism simply for floating the hypothetical in that article. Granted, the hypothetical was founded on Tesla being unable to overcome challenges, not overcoming challenges and privatizing on the resulting rise in corporate value — an interesting twist. In any case, our piece was really just meant as a fanciful exploration of an alternate reality. We didn’t think there was any real chance of Tesla leaving the public markets.