Buyers Are Avoiding Teslas Because Elon Musk Has Become So Toxic
Buyers Are Avoiding Teslas Because Elon Musk Has Become So Toxic
According to a recent survey, Tesla's reputation is plunging, which could be due to Musk's off-putting and problematic behavior.
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He's damaging the company's finances in other ways now too.
He sold a bunch of Tesla stock (admittedly his right to do so) to buy Twitter. However, now he's demanding the board give him more stock so he'll have more control back. Uh, Mr. Musk, you HAD the stock and control, but you traded it away to buy a social media platform. No one made you do that. Further, why should the company give you more stock when another social media platform may catch your eye and you sell all your stock again. You just can't be trusted with it after your past behavior with it.
No thank you. No more Tesla control for you Mr. Musk.
How does the board "give" him stock? Isn't all of the stock owned by individuals? The board are a bunch of high-tier investors right?
Isn’t all of the stock owned by individuals?
Not usually. A company can issue stock, but never sell it. This is called "Treasury Stock". Further if the company doesn't have any Treasury Stock, they can choose to issue new rounds of stock diluting the per share value of existing shares. The good reasons to do this is to raise capital needed for new investments by the company. Alternatively the company could issue a "stock split" which creates double amount of shares as a way to intentionally cut the value per share in half (doubling the amount of share in the company).
However, none of these are a good thing to do for an employee (Musk) because they sold too much of their own pile of stock to buy a failing social media company.
Not really a stock guy, so sorry for a potentially ignorant question, but wouldnt that basically reduce the % of ownership every stockholder has? I understand how that works with splitting stock, since you dont actually loose any % you just have twice the amount of stock with half %. but couldnt a company just "steal itself away" from its stockholders that way?
Yes to your first question. This is why, when a company issues new stock (that isn't a split) the value of all the shares usually falls by a greater level than just the value issued. For publicly traded companies the leaders of the company have to act in the interests of shareholders. So if they tried to steel away the company by diluting stock, or enriching themselves, they would be in breech of their fiduciary responsibilities. There are legal consequences for that.
For privately held companies (not publicly traded), this is a common trope/scam for small companies. There are far fewer protections for private shareholders.
To be fair, while they didn't "make" him buy Twitter, they did twist his arm pretty good when presenting his options. Either it was a major federal financial crime, or he actually meant it and he was totally gonna follow through with it.
To be fair, while they didn’t “make” him buy Twitter,
The "they" in your sentence was the SEC, not Tesla Inc.
Why should Tesla Inc be forced to part with more stock given to Mr. Musk to compensate for consequences of Mr. Musk's own actions wholly separate from his duties and responsibilities at Tesla Inc?
You mean he said a bunch of stupid shit that got him an a legal bind? Yeah still his fault.
He thought he could pull a fast one, fucked around and found out.
Then made it Tesla shareholders problem by cashing out tens of billions of Tesla stock.
He wasn't forced to go down the waterslide until he tried to stop halfway down.
He twisted his own arm. I didn't really read the specifics but given the securities fraud he committed that the SEC did not prosecute, this one must have been pretty serious.