Is Tesla a good investment?

[mistymoney]

Is Musk still pushing to receive a 56 billion dollar pay package this year?

https://qz.com/tesla-elon-musk-investors-approve-compensation-pay-plan-1851415316

yes, and it is up for shareholder vote. I will be voting against it.

I do appreciate musk working tirelessly for the promotion of tesla and all, (athough not his penchant for assholery) but I think being in the top of the wealthiest people in the world/history of the world is enough compensation. If he wants to be richer - he can increase the value of the share he already has. Just my opinoin.

The layoffs do seem extremely punitive and retaliatory. If cuts need to be made for a bad quarter - let it come from the top. How many sales have been lost due to his own need to air the polution in his mind and call it truth? He is more responsible for it than anyone, again my opinoin.

I still think tech wise tesla is heading in a good direction and if in fact musk's vision quests are a key part to tesla's future success, so be it. But if so - let him be only the visionary CEO and get a competent COO to run the organization and make day to day decisions. I don't like workers getting laid off willy nilly while he is seeking billions in compensation for himself. Um - you failed too buddy.

And I wish the board would censure him for his twitter rants that are definitely hurting tesla's bottom line these days.

[bacchi]

Musk claims that Tesla will be spending $500M on expanding the SC network this year. That's good news for all EVs but it's looking more and more like the SC layoffs were a spiteful act against someone who questioned his wisdom. Or...he uses X and press feedback on how to run Tesla. Enough people were like, "WTF?", and he backtracked.

As the latest exec to leave Tesla (the 7th recently?) said, "it’s hard to see the long game." With Musk in charge, that's true.

[FINate]

As the latest exec to leave Tesla (the 7th recently?) said, "it’s hard to see the long game." With Musk in charge, that's true.

It's somewhat unusual for a departing executive to criticize the company on the way out. Doing so can be risky and career limiting. This guy must have been extremely unhappy and/or figures Musk's brand is so toxic that essentially saying I don't agree with how Musk is running things works in his favor.

[NorCal]

Taking a step back and looking at the investment picture while ignoring the Elon Musk picture:

Q1 Revenue: Down 9% compared with Q123
Q1 Net Income: Down 55% compared with Q123

All external indications like massive layoffs and chaotic downsizing indicates a a lack in confidence in the future revenue growth.  It's an indication we're more likely to see continued revenue declines instead of revenue growth.  It's up to management to prove me wrong on that one. 

They are trying (and somewhat succeeding) at being valued like a tech growth company when the underlying financials show the opposite.

While the financial picture probably could be improved by activist investors, I don't see the activist investor crowd taking much interest until the stock falls to a much lower level. 

[FireLane]

Two weeks after firing the entire Supercharger team, Musk wants to hire some of them back:

https://arstechnica.com/cars/2024/05/tesla-does-180-on-superchargers-rehiring-laid-off-staff-amid-new-plans/

This seems like ordinary Musk management-by-chaos, making a stupid decision without thinking and then seeking to undo it. However, it also appears that Tesla has removed all job postings in the U.S.:

https://qz.com/tesla-hiring-freeze-job-postings-elon-musk-layoffs-1851463668

I don't think Tesla is a distressed company, but it's sure acting like one.

[achvfi]

What a sick joke. I cant imagine what employees are going through. 

Maybe they are implementing what they learnt from twitter saga. Fire big chunk of workforce, hire some back and then fire them again in few weeks. Twitterization of Tesla.

[ChpBstrd]

What a sick joke. I cant imagine what employees are going through. 

Maybe they are implementing what they learnt from twitter saga. Fire big chunk of workforce, hire some back and then fire them again in few weeks. Twitterization of Tesla.

Maybe the idea is to motivate everyone to work harder to get good reviews so that they won't be among those cut?

Another possibility is that Tesla has become one of those companies which targets a bottom % of their employees to fire every year as a matter of policy.

Still, if I was a talented engineer or developer or whatever at Tesla this climate of fear-based motivation would encourage me to check out some local startups. The real suckers are the ones who bought houses near these remote factories and are now mortgage-locked.

[FireLane]

According to new reporting by Reuters, there was no strategy behind Musk's decision to lay off the Supercharger team. It was an act of pure spite against Rebecca Tinucci, the head of the division, because she refused to be a yes-woman:

https://www.reuters.com/business/autos-transportation/inside-story-elon-musks-mass-firings-tesla-supercharger-staff-2024-05-15/

The day before Elon Musk fired virtually all of Tesla’s electric-vehicle charging division last month, they had high hopes as charging chief Rebecca Tinucci went to meet with Musk about the network’s future, four former charging-network staffers told Reuters.

After Tinucci had cut between 15% and 20% of staffers two weeks earlier, part of much wider layoffs, they believed Musk would affirm plans for a massive charging-network expansion.

The meeting could not have gone worse. Musk, the employees said, was not pleased with Tinucci’s presentation and wanted more layoffs. When she balked, saying deeper cuts would undermine charging-business fundamentals, he responded by firing her and her entire 500-member team.

Not to keep dumping on Musk all the time, but really... in any discussion about whether or not to invest in Tesla, he's by far the biggest risk factor. He's willing to trash an entire, profitable division of his own company just to prove he's the boss and he can do what he wants.

[NorCal]

According to new reporting by Reuters, there was no strategy behind Musk's decision to lay off the Supercharger team. It was an act of pure spite against Rebecca Tinucci, the head of the division, because she refused to be a yes-woman:

https://www.reuters.com/business/autos-transportation/inside-story-elon-musks-mass-firings-tesla-supercharger-staff-2024-05-15/

The day before Elon Musk fired virtually all of Tesla’s electric-vehicle charging division last month, they had high hopes as charging chief Rebecca Tinucci went to meet with Musk about the network’s future, four former charging-network staffers told Reuters.

After Tinucci had cut between 15% and 20% of staffers two weeks earlier, part of much wider layoffs, they believed Musk would affirm plans for a massive charging-network expansion.

The meeting could not have gone worse. Musk, the employees said, was not pleased with Tinucci’s presentation and wanted more layoffs. When she balked, saying deeper cuts would undermine charging-business fundamentals, he responded by firing her and her entire 500-member team.

Not to keep dumping on Musk all the time, but really... in any discussion about whether or not to invest in Tesla, he's by far the biggest risk factor. He's willing to trash an entire, profitable division of his own company just to prove he's the boss and he can do what he wants.

I'll use this as one potential justification for investing in Tesla.

There's probably a good bit of upside if he gets kicked to the curb.

We'll also see what happens with his compensation package.  Per the WSJ, it looks like institutional shareholders are voting against the pay package by a healthy margin.

Keep in mind the sheer scale of this package.  Taking the $56B number at face value (which is dangerous when talking about options), this is ~10% of the entire company.  If this package is turned down, each Tesla shareholder will own roughly ~10% more of the company than they otherwise would.  While the word "unprecedented" gets thrown around a lot these days, I think it really applies here. 

It doesn't change my negative take on the company.  But it is fairly telling that the biggest bull case for the stock is that the CEO gets fired and his fraudulent pay package gets turned down.

[ChpBstrd]

According to new reporting by Reuters, there was no strategy behind Musk's decision to lay off the Supercharger team. It was an act of pure spite against Rebecca Tinucci, the head of the division, because she refused to be a yes-woman:

https://www.reuters.com/business/autos-transportation/inside-story-elon-musks-mass-firings-tesla-supercharger-staff-2024-05-15/

The day before Elon Musk fired virtually all of Tesla’s electric-vehicle charging division last month, they had high hopes as charging chief Rebecca Tinucci went to meet with Musk about the network’s future, four former charging-network staffers told Reuters.

After Tinucci had cut between 15% and 20% of staffers two weeks earlier, part of much wider layoffs, they believed Musk would affirm plans for a massive charging-network expansion.

The meeting could not have gone worse. Musk, the employees said, was not pleased with Tinucci’s presentation and wanted more layoffs. When she balked, saying deeper cuts would undermine charging-business fundamentals, he responded by firing her and her entire 500-member team.

Not to keep dumping on Musk all the time, but really... in any discussion about whether or not to invest in Tesla, he's by far the biggest risk factor. He's willing to trash an entire, profitable division of his own company just to prove he's the boss and he can do what he wants.

I'll use this as one potential justification for investing in Tesla.

There's probably a good bit of upside if he gets kicked to the curb.

We'll also see what happens with his compensation package.  Per the WSJ, it looks like institutional shareholders are voting against the pay package by a healthy margin.

Keep in mind the sheer scale of this package.  Taking the $56B number at face value (which is dangerous when talking about options), this is ~10% of the entire company.  If this package is turned down, each Tesla shareholder will own roughly ~10% more of the company than they otherwise would.  While the word "unprecedented" gets thrown around a lot these days, I think it really applies here. 

It doesn't change my negative take on the company.  But it is fairly telling that the biggest bull case for the stock is that the CEO gets fired and his fraudulent pay package gets turned down.

For Musk to be "fired" I think he'd first have to reduce his 13% stake in the company and death grip on the Board. That's a possibility, especially if Twitter continues to suck or if Tesla stock falls to the point his loans are called. Musk also has one foot in Open AI, and could decide to exit the boring and frustrating engineering limitations of making cars to get into the business of generative AI.

[mistymoney]

According to new reporting by Reuters, there was no strategy behind Musk's decision to lay off the Supercharger team. It was an act of pure spite against Rebecca Tinucci, the head of the division, because she refused to be a yes-woman:

https://www.reuters.com/business/autos-transportation/inside-story-elon-musks-mass-firings-tesla-supercharger-staff-2024-05-15/

The day before Elon Musk fired virtually all of Tesla’s electric-vehicle charging division last month, they had high hopes as charging chief Rebecca Tinucci went to meet with Musk about the network’s future, four former charging-network staffers told Reuters.

After Tinucci had cut between 15% and 20% of staffers two weeks earlier, part of much wider layoffs, they believed Musk would affirm plans for a massive charging-network expansion.

The meeting could not have gone worse. Musk, the employees said, was not pleased with Tinucci’s presentation and wanted more layoffs. When she balked, saying deeper cuts would undermine charging-business fundamentals, he responded by firing her and her entire 500-member team.

Not to keep dumping on Musk all the time, but really... in any discussion about whether or not to invest in Tesla, he's by far the biggest risk factor. He's willing to trash an entire, profitable division of his own company just to prove he's the boss and he can do what he wants.

I'll use this as one potential justification for investing in Tesla.

There's probably a good bit of upside if he gets kicked to the curb.

We'll also see what happens with his compensation package.  Per the WSJ, it looks like institutional shareholders are voting against the pay package by a healthy margin.

Keep in mind the sheer scale of this package.  Taking the $56B number at face value (which is dangerous when talking about options), this is ~10% of the entire company.  If this package is turned down, each Tesla shareholder will own roughly ~10% more of the company than they otherwise would.  While the word "unprecedented" gets thrown around a lot these days, I think it really applies here. 

It doesn't change my negative take on the company.  But it is fairly telling that the biggest bull case for the stock is that the CEO gets fired and his fraudulent pay package gets turned down.

For Musk to be "fired" I think he'd first have to reduce his 13% stake in the company and death grip on the Board. That's a possibility, especially if Twitter continues to suck or if Tesla stock falls to the point his loans are called. Musk also has one foot in Open AI, and could decide to exit the boring and frustrating engineering limitations of making cars to get into the business of generative AI.

but he has threatened to take the AI out of tesla with him. I mentioned this before and not sure how it would work/if he could get away with it or not.

[Retire-Canada]

I do hope Elon starts a company called Musk Corp, develops a flying skateboard and flies around major cities in the US dressed in green and cackling like a lunatic while contemplating his Master Plan for the Human Race as a sort of real life Lex Luthor/Norman Osborn. It seems like the logical next step in his career progression.

[mistymoney]

Per the WSJ, it looks like institutional shareholders are voting against the pay package by a healthy margin.

I googled but couldn't find this. Can you point me to where this might be?

[maizefolk]

Musk also has one foot in Open AI, and could decide to exit the boring and frustrating engineering limitations of making cars to get into the business of generative AI.

Musk was involved early on in OpenAI, but since 2018 he doesn't  have any ownership, control, or role in OpenAI.

He did start his own AI company (xAI), but it's reasonably small and doesn't appear to be leading or at the cutting edge.

[mistymoney]

from this:
https://www.theregister.com/2024/05/15/tesla_shareholder_vote_on_giving/

Such a campaign might be needed in order for the vote to pass, which can only happen if a majority of voting shareholders agree. However, Musk, who owns 13 percent of Tesla stock won't be able to vote on the proposal, which means it comes down to the other 87 percent of shares. Of particular note is the fact that around 30 percent of all Tesla shares are owned by individual investors, which makes their vote count even more since Musk's shares are excluded.

Big institutional shareholders were not completely convinced back in 2018, such as investment management group Vanguard, and their support isn't guaranteed this time around either. The approval of individual investors, who tend to skip votes, could potentially shift the balance in Musk's favor

So - musk has 13%, individual investors like me have 30%, so 57% is institutional? And musk's don't count, so it would come down to 34% weighted on individual and 66 on institutional.

I wonder how much of the 30% individual is friends and family - like kimbal or other board members? Maybe his mom too!

The lit put out on this was a bit saccharine, like how dared the vermont court overrule what you the shareholders voted on in 2018! On the tesla website.

Then there are alot of musk fanboys posting on twitter too. Real or otherwise how would I know! But they are all affirming musk as deserving to get paid for his work. He's the richest/second richest person on the earth and a court ruled the pay package too excessive. He has been damaging tesla almost daily with his twitter antics so, I don't think he is 'working' as much for tesla as he should be. Go home and sleep in your bed and keep your toxic yapper closed on twitter.

I only wish there were more shareholder proposal to vote on. there were some good ones that aren't being talked about, and I hope the vote goes in shareholders favor.

[NorCal]

Per the WSJ, it looks like institutional shareholders are voting against the pay package by a healthy margin.

I googled but couldn't find this. Can you point me to where this might be?

I found the article, but realized I misread the chart.  The chart in the article references the institutional shareholders that voted against this package back in 2018.

I find it a stretch to think that many will vote for the package that didn’t vote for it before though.

My wife works with corporate governance issues every day, and her opinion is that the entire concept of corporate governance is a mockery if this type of pay package can be approved.

https://www.wsj.com/business/tesla-hits-the-road-to-persuade-shareholders-to-pay-elon-musk-46-billion-6ea31ea5?st=y87tmxucz8tqss6&reflink=article_copyURL_share

[mistymoney]

Per the WSJ, it looks like institutional shareholders are voting against the pay package by a healthy margin.

I googled but couldn't find this. Can you point me to where this might be?

I found the article, but realized I misread the chart.  The chart in the article references the institutional shareholders that voted against this package back in 2018.

I find it a stretch to think that many will vote for the package that didn’t vote for it before though.

My wife works with corporate governance issues every day, and her opinion is that the entire concept of corporate governance is a mockery if this type of pay package can be approved.

https://www.wsj.com/business/tesla-hits-the-road-to-persuade-shareholders-to-pay-elon-musk-46-billion-6ea31ea5?st=y87tmxucz8tqss6&reflink=article_copyURL_share

Thanks for the followup. Found a couple threads on reddit where shareholders were voting against the package, texas move, and board members. Of course there are the fanfic thread. There will be a lot voting both ways so it's anyone's guess which way the count will go.

But was nice to find a bunch of people holding the stock are done with elon and the board. But even if that is so, is change really possible with the board nothing more than a string of toadies for musk? how does a change over occur if the ceo and board are in cahoots?

[NorCal]

Per the WSJ, it looks like institutional shareholders are voting against the pay package by a healthy margin.

I googled but couldn't find this. Can you point me to where this might be?

I found the article, but realized I misread the chart.  The chart in the article references the institutional shareholders that voted against this package back in 2018.

I find it a stretch to think that many will vote for the package that didn’t vote for it before though.

My wife works with corporate governance issues every day, and her opinion is that the entire concept of corporate governance is a mockery if this type of pay package can be approved.

https://www.wsj.com/business/tesla-hits-the-road-to-persuade-shareholders-to-pay-elon-musk-46-billion-6ea31ea5?st=y87tmxucz8tqss6&reflink=article_copyURL_share

Thanks for the followup. Found a couple threads on reddit where shareholders were voting against the package, texas move, and board members. Of course there are the fanfic thread. There will be a lot voting both ways so it's anyone's guess which way the count will go.

But was nice to find a bunch of people holding the stock are done with elon and the board. But even if that is so, is change really possible with the board nothing more than a string of toadies for musk? how does a change over occur if the ceo and board are in cahoots?

It’s usually the institutional money that makes a difference. A fund voting 10M shares has a bit more say than a random redditor with 7 shares.

Tesla’s a little out of the norm, with significant shares held by individual investors. But I think you’re right that the mood has turned among individual investors.

From that WSJ chart, my rough math is that institutional shareholders voted against the package roughly 2:1 last time. It will be less this time.  While anything can happen, I would put money on Elon getting his payday.

It’s hard to overstate how ridiculous and out of the norm this situation is.  A Delaware court ruled that Tesla’s board was so conflicted that they couldn’t objectively set compensation for the CEO. No public company other than Tesla is crazy enough to put themselves in that situation.

Any other company in this situation would make fundamental changes to board composition and structure. Having a board that can’t objectively evaluate the CEO defeats the purpose of a board.

The one thing a company in this situation shouldn’t do is to cram through a comp plan that a court of law says was designed in a way into deceive shareholders. And even more importantly, a board that is struggling to appear independent shouldn’t be out selling said compensation plan to shareholders.

[bacchi]

From that WSJ chart, my rough math is that institutional shareholders voted against the package roughly 2:1 last time. It will be less this time.  While anything can happen, I would put money on Elon getting his payday.

It’s hard to overstate how ridiculous and out of the norm this situation is.  A Delaware court ruled that Tesla’s board was so conflicted that they couldn’t objectively set compensation for the CEO. No public company other than Tesla is crazy enough to put themselves in that situation.

Any other company in this situation would make fundamental changes to board composition and structure. Having a board that can’t objectively evaluate the CEO defeats the purpose of a board.

The one thing a company in this situation shouldn’t do is to cram through a comp plan that a court of law says was designed in a way into deceive shareholders. And even more importantly, a board that is struggling to appear independent shouldn’t be out selling said compensation plan to shareholders.

From what you wrote, why would you expect more institutions to vote in favor? Tesla stock hasn't done that well since he bought Twitter and the near-term sales/revenue prognosis isn't exactly great. Why would institutions be more favorable to an outsized package now compared to 2018?

[NorCal]

From that WSJ chart, my rough math is that institutional shareholders voted against the package roughly 2:1 last time. It will be less this time.  While anything can happen, I would put money on Elon getting his payday.

It’s hard to overstate how ridiculous and out of the norm this situation is.  A Delaware court ruled that Tesla’s board was so conflicted that they couldn’t objectively set compensation for the CEO. No public company other than Tesla is crazy enough to put themselves in that situation.

Any other company in this situation would make fundamental changes to board composition and structure. Having a board that can’t objectively evaluate the CEO defeats the purpose of a board.

The one thing a company in this situation shouldn’t do is to cram through a comp plan that a court of law says was designed in a way into deceive shareholders. And even more importantly, a board that is struggling to appear independent shouldn’t be out selling said compensation plan to shareholders.

From what you wrote, why would you expect more institutions to vote in favor? Tesla stock hasn't done that well since he bought Twitter and the near-term sales/revenue prognosis isn't exactly great. Why would institutions be more favorable to an outsized package now compared to 2018?

Typo from mobile. I wouldn’t put money on it. I expect institutional support for the pay package to be pretty small.