Knowl­edge Zone

India Business Journal - - CONTENTS - ELON REEVE MUSK

- Elon Musk, Chiar­man, Tesla - Cur­rency Swap

- Spir­i­tual Cor­ner: Science of Karma

Last month, Elon Musk stepped down as chair­man of Tesla. The exit was brought about by a set­tle­ment of fraud charges brought by US mar­ket reg­u­la­tor Se­cu­ri­ties and Ex­change Com­mis­sion (SEC) against the Tesla chief for "ma­nip­u­lat­ing the mar­ket".

The present trou­ble for the 47year-old, mav­er­ick in­ven­tor-en­tre­pre­neur started with an Au­gust 7 tweet. In it, Mr Musk had re­vealed that he was con­sid­er­ing tak­ing Tesla pri­vate at $420 a share and had fund­ing se­cured. This had led to a surge in the Palo Alto, US-based elec­tric ve­hi­clemaker's (e-ve­hi­cle) stock price, lead­ing to in­ter­ven­tion of the SEC. The SEC sued him in late Septem­ber for mak­ing "false and mis­lead­ing" state­ments to in­vestors.

As a part of Mr Musk's set­tle­ment, both Tesla and Mr Musk will each pay a $20 mil­lion fine to the mar­ket reg­u­la­tor. Mr Musk has stepped down as Tesla's chair­man but con­tin­ues to be its CEO. Robyn Den­holm, a Tesla board mem­ber and for­mer CFO of Aus­tralian tele­com com­pany Tel­stra, has as­sumed charge as the e-ve­hi­cle­jobs, maker's new chair­per­son.

Such crises are not new to the Tesla chief. He has been in many such try­ing times be­fore set­ting up Tesla and even af­ter tak­ing charge of the e-ve­hi­cle-maker in 2004. Born on June 28, 1971 in Pre­to­ria, South Africa, Mr Musk moved to Mon­treal, Canada, in 1989 and af­ter work­ing in low-paid he re­lo­cated to the US in 1992.

He grad­u­ated in Physics and Eco­nomics from The Whar­ton School of the Uni­ver­sity of Penn­syl­va­nia. Young Musk would al­ways think of do­ing some­thing that would have great im­pact on the fu­ture of hu­man­ity's des­tiny. Af­ter his dou­ble grad­u­a­tion, he ze­roed in on three is­sues - the in­ter­net, tran­si­tion to re­new­able en­ergy sources and space coloni­sa­tion - and was con­vinced that these is­sues would change the course of hu­man des­tiny.

To­gether with his brother, Kim­bal Musk, he set up his first IT com­pany Zip2 in 1995. It was a time when the in­ter­net was ex­pe­ri­enc­ing a pe­riod of rapid growth and de­vel­op­ment. How­ever, no­body had ever earned a con­sid­er­able for­tune from it. Mr Musk's com­pany was one of the first ones to do this. Zip2 cre­ated a plat­form where news­pa­pers - in­clud­ing cred­i­ble ones like The New York Times - could of­fer their cus­tomers some ad­di­tional com­mer­cial ser­vices. In 1999, the big­gest search en­gine of that time Al­taVista bought Zip2 for $307 mil­lion in cash and

$34 mil­lion in se­cu­ri­ties. This deal set a record for sell­ing a com­pany for cash.

In 1999, he went on to set up X.com, which a year later got merged with Con­fin­ity and was re­named Pay­Pal. Af­ter Pay­Pal was bought by eBay in 2002, Mr Musk turned his fo­cus to space en­gi­neer­ing and al­ter­na­tive en­ergy sources. In 2004, Mr Musk in­vested $70 mil­lion in Tesla Mo­tors, founded by en­gi­neers Martin Eber­hard and Marc Tarpen­ning in 2003. Tesla rev­o­lu­tionised mod­ern trans­porta­tion with launch of Tesla Road­ster sports e-car, with Mr Musk ac­tively par­tic­i­pat­ing in its de­sign­ing. Soon to fol­low from the Tesla sta­ble were premium sedan Tesla Model S and other e-cars and e-trucks.

The big­gest chal­lenge for Tesla and Mr Musk now is to roll out Model 3 in large num­bers. At $35,000 for the base model, Model 3 will trans­form Tesla from a niche car-maker for the wealthy to an af­ford­able car com­pany for the masses. With Mr Musk still the CEO of Tesla, the Model 3 chal­lenge is likely to be over­come soon.

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