Latest Musk missive delivers new dose of confusion over future prospects for Tesla
Elon Musk has revealed a bit about his mooted buyout of Tesla, and a lot about himself. On Monday he explained why he thinks a $59 billion take-private deal is doable, and claimed that the Saudis want to finance it. But the way he has handled disclosures confirms how illsuited he is for his public role.
That was already evident from other Musk moments. On an earnings call in May he berated Wall Street analysts for asking “boring, bonehead questions,” then publicly apologized three months later. In July, he labeled one of the divers who rescued a boys’ soccer team from a cave in Thailand a pedophile. Musk is prone to setting grandiose targets, only to miss them or dial them back.
Precision seems to be a problem too. Just two weeks ago, when asked whether making a million vehicles in 2020 is still the plan, he replied “if not, it’s going to be pretty close... somewhere between 0.5 million and 1 million seems pretty likely.” That’s an exceptionally generous margin of error.
That flaw has resurfaced in Musk’s overly free definition of what he last week called “secured” funding for his buyout. That ought to mean that he and the Saudi sovereign wealth fund have already signed an agreement locking in the money.
For Musk, it equates to “strongly expressed... support” which is “subject to financial and other due diligence and their internal review process for obtaining approvals” – as well as his own guesswork about how many current shareholders would be willing to stay with a delisted Tesla.
What’s more, it took Musk six days to provide this rationale. That leaves him and Tesla at risk of lawsuits from both shareholders and the Securities and Exchange Commission. Those might have been easily avoided if he had presented additional information when he first tweeted about the deal on August 7.
There’s no evidence that Tesla’s directors, most of whom are Musk’s friends, family or business partners, are willing or able to rein him in. Meanwhile, Tesla’s share price is 15 percent below the amount Musk says he would offer, suggesting investors think a deal is unlikely. That’s unfortunate: His irresponsible actions show just why going private would be better.
The author is Antony Currie, a Reuters Breakingviews columnist. The article was first published on Reuters Breakingviews. bizopinion@globaltimes.com.cn