Elon Musk has trapped Tesla shareholders in a vicious cycle that has nothing to do with he firm’s efficiency or mission anymore. He’s linking a vote for his compensation package deal, value as much as $1 trillion and extra management over the corporate, to the way forward for Tesla and, in his delusions of grandeur, “the way forward for the world.”
He actually stated that.
How far would you be keen to go to get $1 trillion? Would you be keen to lie?
Tesla, beneath the management of Elon Musk, is in full-on advertising and marketing mode proper now, however it’s to not promote its electrical automobiles, whose gross sales have been down for two years now. It’s to promote shareholders on voting for a brand new, unprecedented compensation package deal for Musk.
The automaker has traditionally been towards operating adverts. It dabbled in it after Musk purchased Twitter, which depends on promoting, however it rapidly gave up on the hassle.
Nevertheless, Tesla is at present operating 5 adverts on Google, and they’re all about getting Tesla shareholders to vote for Musk’s new compensation package deal:
You would possibly even see these adverts on this article since it’s about Tesla, and Google runs most of our adverts on Electrek.
Musk himself has been selling the vote on X (previously Twitter) and says that “the way forward for Tesla” and even presumably “the way forward for the world” hinges on the vote:
“This shareholder vote decides the way forward for Tesla and will have an effect on the way forward for the world.”
Tesla additionally straight urged shareholders to vote because the board recommends on the upcoming shareholders assembly on November sixth:
We’re asking you to vote with the Board’s suggestions on *all* proposals. Tesla is on the precipice of one other large wave of transformational progress, as demonstrated by the disclosing of our Grasp Plan Half IV. If you happen to consider, like us, that Elon Musk is the CEO that may make this formidable imaginative and prescient a actuality, vote your shares.
They’ve been framing this as a vote on retaining Elon Musk as CEO.
The proposals that shareholders will vote on on the assembly embody the reelection of three board members, creating extra diluting shares for inventory compensation, a vote on Musk’s new compensation package deal, and various proposals introduced ahead by shareholders.
Tesla’s board is recommending that shareholders vote on all its proposals and vote towards all shareholders’ proposals apart from one that may authorize Tesla to put money into Musk’s xAI.
Electrek’s Take
“Infinite progress.” The way forward for Tesla.” “The way forward for the world.” And all of it solely occurs in case you give the world’s richest man the largest compensation deal ever – in truth, 20x larger than the subsequent greatest compensation deal ever, which was additionally his.
That particular person additionally occurs to have spent the higher a part of the final 12 months tweeting lots of of instances a day, principally stoking tradition wars and sharing misinformation.
It’s nonsense. That is the sort of guess that degenerate gamblers take, however sadly, that’s an enormous a part of the inventory market nowadays. Degenerate gamblers and folks misplaced in Musk’s cult of character, which consists of Tesla’s shareholder base nowadays.
In response to the board, Musk has threatened to depart if he doesn’t get this compensation package deal. As I’ve usually said, I consider Tesla’s enterprise would enhance considerably in each the quick and long run with out Musk.
Nevertheless, there’s little doubt that the inventory would take an enormous hit within the quick time period, and that’s the entice.
Tesla shareholders are disincentivized to see by way of Musk’s lies, and Musk has been mendacity his butt off.
Just lately, Musk materially misrepresented Tesla’s gross sales as sturdy in Q2, regardless of a 13% year-over-year decline globally. Nevertheless, many of the CEO’s lies concern Tesla’s future merchandise, particularly autonomous driving and robots.
He was lower than forthcoming about all of Tesla’s public Optimus robotic demonstrations being remotely managed by people. He has persistently lied to shareholders about Tesla’s being on the verge of attaining unsupervised self-driving with out ever sharing any information to show it.
Tesla has but to attain unsupervised self-driving in the present day in 2025, regardless of Musk claiming it might occur by the tip of yearly for the final 6 years. When does it develop into mendacity?
You would possibly declare that lacking a deadline is just not “mendacity” per se and it’s simply being too optimistic, however I believe the one reply to the query “when will Tesla obtain unsupervised self-driving” that’s not a lie is “I don’t know.”
I don’t know. Tesla doesn’t know. And Musk clearly doesn’t know.
The very best information at present obtainable level to Tesla being at roughly 400 miles between vital disengagements, and it must be at a minimal of 10,000 miles for a restricted unsupervised self-driving service.
We don’t understand how a lot time it might take Tesla to shut that large hole, however it received’t be by the tip of this 12 months, as Musk claims.
As for Optimus, Musk claims that it’s going to propel Tesla to a $25 trillion valuation. But, demonstrations level to Tesla being years behind rivals, equivalent to Unitree, Determine, and others.
Final 12 months, Musk promoted an engineer to steer the robotic program, however he left simply months later, and we simply realized in the present day that the top of Optimus AI can also be leaving.
This system seems to be in shambles.
Shareholders should consider this delusion that Tesla is in some way going to dominate the humanoid robotic and autonomous driving house, regardless of no proof to counsel that is taking place, and fierce competitors forward in each product segments. If not, Tesla’s inventory would crumble as a result of its present EV and vitality enterprise can’t justify the inventory value.
And who retains this delusion going? Elon Musk.
Musk has Tesla shareholders in a Stockholm Syndrome state of affairs.
Suppose they vote towards him, and he leaves. In that case, he’ll depart together with his delusions, and Tesla must revert to buying and selling nearer to its fundamentals, which implies slashing the inventory value roughly in half – assuming its EV enterprise returns to more healthy ranges with out Musk’s model injury.
Due to this fact, they gamble on the off likelihood that Musk could make any of the delusions occur or at the very least preserve it going lengthy sufficient for the inventory value to go up.
There’s no extra unmistakable proof of Tesla shareholders having a case of Stockholm Syndrome than Musk threatening them to not construct AI merchandise at Tesla if he doesn’t obtain his compensation package deal, which might improve his management in Tesla.
This constitutes a breach of fiduciary duties, as he himself has claimed that AI merchandise are vital to Tesla’s future.
After which, they ask for Tesla to approve investing in Musk’s personal AI startup xAI. Apparently, that is the one shareholder’s proposal that Tesla’s board is just not recommending towards. In reality, they aren’t giving any suggestion for that one.
That’s as a result of Musk has to remain as far-off as doable in recommending that Tesla put money into xAI.
Shareholders are at present suing Musk for establishing xAI within the first place. The corporate is straight competing with Tesla for high expertise in breach of Musk’s fiduciary duties to Tesla shareholders as an government officer of the corporate.
I’ve defined this example in my report on Musk’s try to regulate AI earlier this 12 months:
xAI has straight recruited from Tesla, Musk has diverted computing energy meant for Tesla to xAI, and he has hung out engaged on xAI that he might have spent at Tesla.
It’s fairly humorous. Some shareholders are suing for Tesla to get Musk’s whole stake in xAI whereas others are pushing for Tesla to provide cash to xAI. It’s insanity.
