The CEO of the company has been controversial on Twitter for months, and has already faced some requests from its investors to relieve him.
Musk alone already owns 22% of Tesla, a shareholding situation that does not prevent him from exercising strict control.
The company seems to be at a turning point towards profitability after achieving 5,000 vehicles a week.
Elon Musk has been the face of innovation for the past ten years. If today we had to tell an alien who Musk is, we could tell him the romantic story of a visionary who, on the back of his 21,000 million dollar fortune, emerged largely after his first big project -PayPal- has proposed to fulfill futuristic dreams for a better world.
Musk is the owner of Tesla , a company that has managed to make attractive electric vehicles with a master plan for the automotive industry to be sustainable with the environment. He has also founded Space X , which is dedicated to doing private work for NASA, Hyperloop , a means of transport that promises to break all the records of efficiency and speed, The Boring Company , a crazy idea that wants to end the traffic jams by making tunnels under our feet and, finally, Neuralink, which aims to connect our brains to computers. "Anything else?" Our extraterrestrial friend could ask us, to which we would have to answer "yes": he has also actively participated until acquiring with his companies SolarCity, a subsidiary also dreamer that wants to revolutionize photovoltaic energy.
Surely by the time we finish telling you this our alien has already become a new follower of Musk . His charisma has long been the greatest asset of his group of companies, and especially Tesla, a company that has never managed to give annual profits but in the second quarter of this year has achieved - finally and after many delays - to fulfill its goal of producing 5,000 Model 3 vehicles a week , the target set for the profitability and viability of the company . Tesla is right now, therefore, at a turning point to go from being a dream company for many to having an accounting in green numbers, essential step to fulfill its true mission: to make the electric vehicle a useful one for all pockets and all over the world.
Criticism of Musk has been fueled by his controversies on Twitter
His way here has not been easy, and less in recent months. First, due to delays in the delivery periods that have made, according to CNN , that up to 24% of the reserves of the Model 3 have been canceled by the long wait of more than a year and the appearance of alternatives in the competition . Secondly, due to its losses, which tripled in 2017 to 2,240 million dollars and which were kept at bay precisely because of the reserves of new vehicles . And in the third place, due to the comings and goings of its CEO Musk, corseted in a series of polemics on Twitter , against the press, and against some of its investors that may indicate that in addition to its company, it can also be he who is passing a turning point.
Musk faced last June, during the last general meeting of shareholders of Tesla, a vote that asked to be relieved of office as President of the firm to put someone independent. The board of directors rejected it emphatically considering that his double position as Chairman and CEO allows the company to adapt quickly to new challenges. Until now at least, it has always been like this. Musk has managed to endow Tesla, as well as his own name and headlines in the press that have made him compete with companies that spend millions on advertising, effective in dealing with crises and problems . What has changed in recent months is that for some the idyllic vision of Musk as a dreamer has been polemicized .
In recent months the company has had to face criticism for the job security of its factories, which has a greater number of occupational accidents in proportion than the rest of motor vehicles, but above all has drawn attention the relationship of Musk with the press, after criticizing the questions of several journalists when in May, during the presentation of results, they inquired about the delays of Model 3 and the losses, and, above all, after calling pedophile on Twitter to a member of the rescuers of the group of children of the cave of Thailand. Musk, in an act that has been assimilated as a mixture of publicity and part of his philanthropic work, ordered to build a small submarine for rescue work. The contraption was discarded, generating the collision of Musk, who ended up asking for forgiveness in a later tweet for his words.
To this the critics of several analysts and investors of Tesla have added themselves . Gene Munster, risk investment analyst, published a few days ago an open letter to Elon Musk where he said that "his behavior is fueling an unhelpful perception of his leadership: without strength and bad temper ", where he also recommended taking a year sabbatical. Also in line with the controversy, James Anderson, partner of Baille Gifford, Tesla's fourth investor, pointed out to The Guardian that it would be preferable for Musk to take a more discreet profile. "It takes a moment of silence and peace to work on the problems," says the investor, "it would be good to concentrate". Musk, which brings together more than 22 million followers on Twitter, seems not to have taken these recommendations seriously, tweeting up to 29 times, although with a calmer profile, since the altercation of the rescue. An average of 2 tweets per day.
With these tensions and a request for his relief already expired, we ask ourselves: is the position of Musk at the head of Tesla at stake? The truth is that for a long time the South African no longer controls the company shareholder, although it does continue to do so in practice, a situation of weakness that now becomes more important than ever.
Although it may not seem like it, Musk only owns 22% of Tesla right now
As we say, Musk has been to a large extent Tesla's great asset over the past few years, a company that does not invest in advertising, given that its leader already gives it to them. Musk, the man in whom Robert Downey Jr. set to play Tony Stark in the role of aggressive millionaire and loudmouth but committed, has always followed a horde of geeks , believers in technology as a solution to everything, and nostalgic of inventors-genius of another era.
And the truth is there is no lack of reasons to follow it, but we must also put Musk in context . And perhaps going back to the protohistory of Tesla serves to exemplify how the current CEO of Tesla protects the company as if it were his, although it has not been completely for a while. Musk is undoubtedly an extraordinary creative mind, but his first steps as the founder of Tesla came from the field of investment, leaving his partners JB Straubel as CTO (he is still with the company) and Martin Eberhard as CEO. Musk put his imagination through the design of the first Tesla prototype (the Roadster), while Eberhard and Straubel focused on management and technique. Eberhard ended up leaving the company in 2007 after the first bankruptcy notice, when Musk was the top investor as well as a partner, and he would end up suing the South African for slander and trying to diminish his weight in the original Tesla story. Eberhard and Musk ended up reaching an agreement in 2009 to put the demand aside. About who had more share of truth in this story there are many versions, but we prefer to think that both had their part of reason: Musk protected his investment in Tesla pressing for the departure of an Eberhard with whom the company was in serious trouble, while the latter is probably not recognized today as much as it deserves as the original part of the company.
Musk ended up putting himself completely in charge after investing millions of dollars in the financing rounds of his own company, which grew exponentially at the same time as his fame, but today his share capital is only sent to 22% , after the IPO. the signing in 2010 and the entry of capital by Daimler, the investment fund AABAR, Toyota or Panasonic, although it remains the majority shareholder.
How is it possible to maintain control with less than a quarter of the company? The executive continues to have a supermajority in the voting rights of the shareholders' meeting that still allow him to exercise his iron control. This was especially true in 2016, when Musk promoted the purchase by Tesla of SolarCity, a company in which it already invested, and which investigated a Delaware court as part of the instructions that are carried out on the absorption of companies. As it became known then, Tesla's bylaws contain voting requirements that require the approval of two-thirds of the shares to accept major changes in the manufacturer.
The 22% of the participation and voting rights in the company does not seem too much compared to for example Mark Zuckerberg, who controls 60% of the votes in the social media giant. In addition, one of the investors of Tesla that more war has given to Musk in the last years, James McRitchie, counted in an interview that the actions of founding partners have greater weight , forcing to join almost 90% of the external votes to beat them a struggle In practice, this is summarized as Musk continues to exercise all power , a mechanism that for Tesla is important because it prevents foreign movements that can divert them from their long-term plan, emerged from the mind of Musk.
Do Musk's polemics really affect Tesla?
With Musk clinging to his chair despite not having more than half of the shares, the other question that must be answered is to what extent his slights on Twitter ballast the company . The answer is that, in the long term it seems that no, although it has had some dramatic points.
Tesla came to the stock market during 2017 for a value that exceeded GM and Ford. In 2018, when Musk made his April Fools' joke in the wake of Tesla's delays, appearing on Twitter with a sign that said the company was bankrupt , his shares fell by 5%. However, his insult to the rescuer of Thailand and his subsequent request for forgiveness hardly seems to have an impression on the stock market. The pattern is, according to an analysis carried out by The Verge , that Tesla shares tend to fall when Musk goes over the line, but they recover again when he reverses or makes some important announcement.
Tesla is still largely Elon Musk, for the good and the bad , although the voices that question his leadership are becoming more notable. It will be necessary to see if the company maintains its production levels as in the last weeks and the mouth-ear of the first Model 3 in the streets makes its scale plan soar on the road to profitability . The inflection point is there, but not only for Tesla, it is also for its CEO.
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This guy seems like a nutcase. The pedo comment really demonstrates a lack of discipline!
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No, he isn't. Never seen person like musk. He is great
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