Looking at the title, you might think I am either anti-Elon Musk or anti-Tesla, or both. I can assure you I am not. Neither am I a Tesla cheerleader.
Tesla does have many attributes that attract investors and speculators alike. In fact, since its listing in the Nasdaq has seen Tesla shares being equally heavily bought and heavily shorted.
Why? The answer is simple. Valuation. Yes, I suppose nobody can agree how to value Tesla. Supporters like to think Tesla as a futuristic company and place a value solely based on its perceived potential. Opponents value Tesla as it is. A EV and battery company. The answer is probably somewhere in between. To be sure, Tesla is not the only company valued for its perceived potential, Nvidia, the AI chips champion, has also been valued at its perceived potential. The main difference is that Nvidia has been reporting results that exceed expected quarter after quarter, while a Elon Musk's premium has been baked into the price of Tesla.
For me, and perhaps not only me, Elon Musk is the main reason NOT to buy Tesla (shares).
When I mentioned Tesla, I wonder readers will think of Tesla, the company, or Tesla, the car. I bet most will think of Tesla, the company. Most might ask if there's any difference! Quite a mouthful to explain here and I will discuss in another article. For now, I am only discussing Tesla, the company.
I will explain why there should be a negative value attached to Elon Musk on Tesla shares price instead of a premium. A single word: RISK, elaborated as follows:
1) The biggest risk is that Elon Musk has treated Tesla as his personal piggy bank.
After selling some of his Tesla shareholding, this is how Elon Musk top back up his shares... And more... Simple, just ask for more, knowing that he will get what he wants (think 'threat' if you may)
2) Tesla shareholders have no option but to give in to any of Elon Musk's demands, thus satisfying the point 1.
3) Elon Musk's eccentric behaviour, such as smoking marijuana in a broadcast, points to potentially wider problem in the future.
4) Elon Musk's vast interests and ever-increasing CEO-ship. I understand that Elon Musk has an exceptionally high IQ. A CEO's job is also not necessarily tied to day-to-day operation. However, multiple stewardship is a problematic on its own. a) As he is mostly not around at any one place, he has to rely heavily on people on the ground. One of the possible reasons for his frequent mistakenly optimistic timelines is due to the information given to him. It is likely people on the ground tell him what he likes to hear. b) conflict of interest.
5) Elon Musk's new political allegiance.
I must admit I am not a fan of (Donald) Trump. I am not sure why would anyone align with Trump's ideology. A person who only boosts and spins lies. He is basically a friend of big oil (drill, baby, drill!) and a naysayer of climate change. Interestingly, in the interview with Donald Trump today, Elon Musk says that there is no urgency in climate change. Consider this: Trump wants to drill in North Pole!!! 😱!!!
6) Finally, like Donald Trump, Elon Musk is a habitual liar! Call him overly optimistic. Do you think that any other CEOs could get away if their companies kept promising something and kept missing the timelines?!
Elon Musk knows his stuff. He knows his tweets or X-msgs will influence Tesla shares price. He did it anyway, knowing that SEC can't do anything about it (as his 'private' messages probably do not constitute sensitive information).
Elon Musk no doubt has great visions. In fact, many people have! The question always lies in the money. Not everyone is this world could or would carry out their visions. I admire and applaud him for that. Having said that, as the title goes, even if I am interested in Tesla, the company, I won't be silly enough to be part of Elon's money contributor. There are no checks and balances in Tesla, which is a potential risk for disaster! It may not be now... Humans are just humans, it will come to pass...
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