Elon Musk

  • The idea that Apple should buy Tesla has been floated many times.
  • Apple now has more than enough cash coming back to the US to do the deal.
  • Tesla needs to be saved from its delusional idea about the company’s future growth — and Apple needs to be saved from the disaster of its car project.

Last November, Rolling Stone published a profile of Tesla CEO Elon Musk, written by Neil Strauss, a neo-gonzo journalist who made his name with a book about pickup culture. And in that interview Musk made a confession.

“I wish we could be private with Tesla,” Musk told Strauss. “It actually makes us less efficient to be a public company.”

Tesla has been public since its 2010 IPO and since then the stock has risen from about $20 a share to nearly $400 at one point in 2017. The company’s market cap is now close to $60 billion. Investors who jumped in seven years ago have enjoyed a return of nearly 1,200%.

Musk might be the only person who wishes Tesla were private. Even short-sellers, recently clobbered by Tesla’s surge, have been delighted when the stock has gone through one of its periodic swoons of $100 in a few months. And ironically, Musk’s next ten years of compensation are now completely tied to Tesla’s market performance, which the board of directors thinks can yield a $650-billion market cap.

That’s delusional. In many ways, it sets Musk up for both continued inefficiency — a lot of second-guessing about investments in automation, for example, at the expense of hitting production targets — and potentially epic failure. It also represents a radical formulation of shareholder value theory.

Tesla is wildly overvalued, and what it needs now isn’t a fatter stock price but rather an ability to satisfy Read More Here