Published on August 8th, 2018 | by Zachary Shahan0
Why Elon’s Possibly Taking Tesla Private
August 8th, 2018 by Zachary Shahan
First of all, note that much of what I’ve written below is just my own personal opinion. I’m not Elon Musk’s mom, psychiatrist, or assistant. Also, despite what many have claimed or joked, I’m not on Tesla’s PR team. I’ve been following Elon’s work obsessively — er, professionally — for nearly a decade. However, others have been following him even longer than me who have seemingly come to opposite conclusions about the dude — that he’s a fraud and a failure rather than an honest, genuine, brilliant success.
In other words, experience covering a person doesn’t mean you really understand him. In the end, either these other auto journalists are 10 gigafactories off the mark or I’m 10 gigafactories off the mark.
That said, I think my assessment of Elon, his aims, and his approach to business and to life is the right one. 😉
The Human Behind the Superhero Costume
Elon is human. As much as people (including Elon) like to joke that he’s a robot or an alien, he’s not. It’s easy for us normal human Earthlings to look at his successes and think that he should be able to shake off any criticisms, but incessant, obsessive, personal smears can touch a person. They can get old. They can get overwhelming. And they can make a normal human wonder, “What can I do to get out of this shitty situation?”
He also knows that he is not the only human being behind the Tesla curtain, and that many others are affected by such negativity. He knows that he is responsible for the work that tens of thousands of employees do every week. If he can do something to boost their morale and limit their depression or anxiety, he would surely like to do that.
Fun > Misery
The Tesla mission that we often reference is the company’s mission to help the world — to help accelerate the transition to sustainable energy and sustainable mobility. However, Elon has always had an additional mission for his companies and his life: to have fun. He has expressed many times that we should enjoy our lives, and that we should do things that are exhilarating, exploratory, and uplifting. You see this in Tesla Easter eggs, in his frequent joking, and in the performance of Tesla vehicles.
It is not a whole lot of fun for employees, customers, shareholders, fans, and Sir “take it all on my shoulders” Elon himself to suffer through misleading attacks on the company and its very visible mascot. It’s not fun for them to spend their time reading or listening to negative story after negative story. It’s not fun for them to have to respond to these. It’s not fun for them to have those responses twisted into another smear. They probably don’t enjoy ending their days wondering if there isn’t anything better to do in life.
Not being a public company, presumably, there wouldn’t be nearly as many unfortunate attacks on Tesla and Elon as we’ve been seeing from Wall Street, major media outlets, and Trolls for Hire LLC. That would make life more enjoyable for Tesla staff, customers, shareholders, fans, and Sir “let’s have some fun!” Elon himself.
Also, from a business perspective, dissolving many of these big money attack campaigns could help to lift the company’s image. Tesla gets superb press coverage about its products, but then gets slammed day and night by the short-selling machine on Wall Street and in the financial press. Ask a person on the street today what they think of Tesla and you could easily get the answer “Oh, I love it! It produces great cars!” or “Isn’t that company about to go bankwupt? I heard it’s burning cash like a Halloween goblin.” It would be helpful for Tesla if the latter dissipated from public consciousness.
If you think that all Tesla needs to do to get rid of the smear campaigns and misleading coverage is get profitable, I’ve got a rainbow bridge to sell you. That said, given that the interests opposed to Tesla are often not directly affected by Tesla’s stock price (they are threatened by the actual business), I could also sell a rainbow bridge to anyone who thinks going private will turn all media coverage rosy. However, much of the press is driven by Wall Street narratives, and getting off the stock market could help Tesla’s brand quite a bit. (On the other hand, there are some downsides to going private, which I’ll cover in another piece.)
Simplicity > Complexity
One of Elon’s innate skills that I think is key to so much of his success is his ability to simplify things. He unclothes complex topics in order to get to the naked essence underneath. Working with the essence of an issue, he creates things almost like an artist does. He connects dots. He builds. He polishes. And he happily shows the world his creations.
Alas, the stock market circus doesn’t excel in simplicity. It likes to complicate things. Many actors create haze when it suits their interests. And the focus is largely on the next quarter or next few seconds, not the grand vision. An artist likes to reflect on the grand vision. A speculator or money manipulator would kill a unicorn if it made them a bit of money for a month.
Not walled in by quarterly reports, artificial targets and breaking points, and short-sighted analysts, Tesla could more effectively and efficiently pursue its goals.
Indeed, Elon and those around him have indicated in a variety of ways over the years that the Tesla IPO was something that came out of necessity in the company’s younger years in order to fund the growth it needed at that time. The public markets supported the company through awkward years of maturation. However, now that it has proven itself, Tesla basically has all the revenue and private equity interest it needs to get stuff done outside the stock market circus. How much more do you think Elon would like to be asked about his company’s products rather than whether or not the company is “burning too much cash” to survive? (By the way, even repeating the term “cash burn” irritates me, because it is so disingenuous and misleading. I can only imagine how much that narrative must irk Elon.)
Just Listen to the Dude
Part of the problem on the public markets has been that many people simply don’t believe Elon. Many don’t believe Tesla’s public statements. It’s a crime for a company or its top representative to lie about various matters to the public, yet many an “expert” claims on a daily basis that Elon/Tesla is lying, defrauding people, and just being an all around evil assmonkey.
Indeed, the Tesla short seller response to the news today has been a bit bewildering — they have hardly covered at all. There are countless claims that Elon’s not serious, that he’s lying, that this is a fanciful last-minute ruse to deceive the public — etc., etc., chitty, chitty, bang, bang. They can’t take simple statements as true or genuine. They have been unwilling to believe that Tesla will turn a profit this quarter, in quarter 4, and indefinitely. They have been unwilling to accept that Tesla has the vast demand for its vehicles that it says it has. Actually, ever since the days Tesla was producing a few hundred cars a year, these critics been unwilling to accept that much more consumer demand is around the corner. Now, some of these same critics have been unwilling to accept that Elon Musk does indeed have the financing lined up to bring Tesla private at $420 a share.
It seems that Elon is tired of trying to convince much of the market that he’s telling them the truth. It seems he’s tired of wasting days out of each quarter catering to the shortsightedness of Wall Street. It seems he’s tired of spending hours upon hours responding to misleading criticisms and bad math.
This line in his letter to employees — later published to the company’s public blog — is perhaps the most telling:
“I fundamentally believe that we are at our best when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we’re all trying to achieve.”