How many lies will Elon Musk be allowed to tell before his adoring shareholders turn on him? From Simon Black at sovereignman.com:
There’s no doubt you know the story…
On August 7, in the middle of the trading day, Tesla founder Elon Musk surprised investors with a tweet saying he was considering taking Tesla private at $420 per share (a $72 billion valuation) with “funding secured.” He quickly followed up with “Investor support is confirmed.”
Shares of Tesla soared 13% to $387 on the cryptic social media update from Tesla’s exalted chief.
The news created a media frenzy around the already red-hot company (and prompted the SEC to investigate Musk and Tesla for potentially lying to investors about a takeover). A single tweet – while the market was still open, no less – was an odd and informal way to announce such a major event.
Did Musk consult Tesla’s board of directors before making this public? Did they even know of his plans to take the company private? Is any of this even true?
It didn’t matter to Tesla’s shareholders, who believe Musk walks on water and his tweets are gospel. So the stock price soared.
And the deal made sense for Musk…
Investors, including himself, would make a fortune.
And he would no longer be bothered by those pesky short sellers, reporting enormous losses to the public and nagging production deadlines (which Tesla continually misses)…
As a private company, Musk wouldn’t even have to ask shareholders’ permission for a $50 billion pay package.
Only, Tesla isn’t going private.
Last Friday, in a blog post (you know the announcement has got to be important if it’s escalated to blog post formality) Musk announced Tesla would stay public.
He gave a bunch of excuses for the decision, including going private would be more time consuming than he realized and that his beloved retail shareholders (his congregation) couldn’t own shares in a private company.
To continue reading: Fool me once, shame on Elon. Fool me twice. . .