I truly can't fathom wanting to keep Musk at the helm of Tesla. It seems at this point the lowest hanging fruit for repairing Tesla's prospects would be to replace him with someone who doesn't cultivate the loathing of potential customers.
The problem is that they are wildly over-valued. Musk squandered their first-mover advantage so they have a ton of competition (most of whom are better at the car side of building cars), a reputation for safety and quality problems, and the things their stock price is based on like self-driving cars are years behind the promised schedule and the competition. The same absentee CEO who is turning away their core customers is also the only reason their share price is over something like $30-40 (as a car maker based on their numbers) or $60-70 (tech company).
That puts their board in a tricky position: he’s destroying their core business but since the share price hasn’t cratered yet, anything which removes the meme-stock status will instantly trigger a shareholder lawsuit. The time to act was years ago, so there aren’t any easy actions now.
Yes, 7 years ago to be exact. And they did act, they made a deal with elmo in 2018. He memied Tesla stock from $20 all the way to $400. You might not like elmo, I mean who would now?, but he did deliver. Refusal to pay out reward for this ridiculous overvaluation is only going to bite them in the ass.
Yes. A full-time CEO who cares about the future would be immensely better for the actual business but the instant he leaves, the share price is going down permanently.
Is that why I see Tesla Superchargers everywhere and not other brands?
They already have first mover advantage with their charging infrastructure (at least in the US), and FSD. Say what you will about FSD, but no other carmaker comes close to it.
I’m not trying to idolize Musky here. I’m simply seeing what Tesla the automaker has to offer compared to their competition.
I see chargers from multiple companies all over now - unlike a decade ago - but they’re allowing other vendors to use them, but that’s not a huge edge to hang that massive P/E off of. Their share price is like they’re early Google or Facebook with very high leverage sales to costs, but that’s just not how the car industry (or anything which makes expensive physical objects) works. They have a good position, although it’s steadily fading, but it’s not a money-printing machine. Electricity is a commodity so there’s an upper bound on profits before competition ramps up.
One of the claims they’ve made is that FSD will change that by allowing them to eat Uber’s business, but that’s years behind schedule and they have nothing approaching Waymo’s experience or safety record, and the self-imposed hardware limitations likely mean that they will never be able to deliver what they sold to many customers. Again, that doesn’t mean they’re bankrupt but I just don’t see a way to justify their stock price on their business fundamentals unless they suddenly get a lot better at making things compared to their competitors.
Presumably the problem is the valuation is based on his hype, not the company fundamentals. So firing him brings the share price down to what it’s actually worth.
I truly can't fathom wanting to keep Musk at the helm of Tesla. It seems at this point the lowest hanging fruit for repairing Tesla's prospects would be to replace him with someone who doesn't cultivate the loathing of potential customers.
The problem is that they are wildly over-valued. Musk squandered their first-mover advantage so they have a ton of competition (most of whom are better at the car side of building cars), a reputation for safety and quality problems, and the things their stock price is based on like self-driving cars are years behind the promised schedule and the competition. The same absentee CEO who is turning away their core customers is also the only reason their share price is over something like $30-40 (as a car maker based on their numbers) or $60-70 (tech company).
That puts their board in a tricky position: he’s destroying their core business but since the share price hasn’t cratered yet, anything which removes the meme-stock status will instantly trigger a shareholder lawsuit. The time to act was years ago, so there aren’t any easy actions now.
> The time to act was years ago
Yes, 7 years ago to be exact. And they did act, they made a deal with elmo in 2018. He memied Tesla stock from $20 all the way to $400. You might not like elmo, I mean who would now?, but he did deliver. Refusal to pay out reward for this ridiculous overvaluation is only going to bite them in the ass.
Yes. A full-time CEO who cares about the future would be immensely better for the actual business but the instant he leaves, the share price is going down permanently.
> Musk squandered their first-mover advantage
Is that why I see Tesla Superchargers everywhere and not other brands?
They already have first mover advantage with their charging infrastructure (at least in the US), and FSD. Say what you will about FSD, but no other carmaker comes close to it.
I’m not trying to idolize Musky here. I’m simply seeing what Tesla the automaker has to offer compared to their competition.
I see chargers from multiple companies all over now - unlike a decade ago - but they’re allowing other vendors to use them, but that’s not a huge edge to hang that massive P/E off of. Their share price is like they’re early Google or Facebook with very high leverage sales to costs, but that’s just not how the car industry (or anything which makes expensive physical objects) works. They have a good position, although it’s steadily fading, but it’s not a money-printing machine. Electricity is a commodity so there’s an upper bound on profits before competition ramps up.
One of the claims they’ve made is that FSD will change that by allowing them to eat Uber’s business, but that’s years behind schedule and they have nothing approaching Waymo’s experience or safety record, and the self-imposed hardware limitations likely mean that they will never be able to deliver what they sold to many customers. Again, that doesn’t mean they’re bankrupt but I just don’t see a way to justify their stock price on their business fundamentals unless they suddenly get a lot better at making things compared to their competitors.
Okay, that checks out.
Presumably the problem is the valuation is based on his hype, not the company fundamentals. So firing him brings the share price down to what it’s actually worth.