The Daily Devil’s Dictionary: Biggest “Impediment” to Tesla
For Elon Musk the sky has never been the limit, but an unfortunate tweet may be his undoing.
To take over the world requires more than just vision and organization. Nations can no longer pretend to do it — as the US empire wanes — because they are confined by their boundaries. In today’s economy, as Business Insider explains, only Elon Musk has a shot at it because taking over the world will require unlimited amounts of money and limitless, unconstrained ambition. Musk’s decision to take Tesla private prepares his takeover of the Earth today and the solar system tomorrow.
He couldn’t do it just by selling branded baseball caps and recreational flamethrowers to raise quick millions. But by going private, and with a little help from his friends (e.g. Mohammed bin Salman), all obstacles may fall. “The biggest impediment to Tesla growing by true leaps and bounds was the capital-intensive nature of its business,” Business Insider reports.
Here is today’s 3D definition:
Annoying obstacles — such as laws and official responsibilities — in the way of achieving world-conquering ambition
Musk decided long ago that he would be the cleverest man not just on Earth, but in the solar system. What could be cleverer than to send other people to Mars (at $200,000 per head) and vow to stay on Earth because, as he says, “the likelihood of death is very high” and “I’d like to see my kids grow up and everything”?
Now he’s playing the ultimate money and power game as he promises to lend his futuristic prestige to the most culturally backward regime in the world, Saudi Arabia, to help it manage its campaign to modernize its image and, in Musk’s own words, “because of the important need to diversify away from oil.” Fed up with running a public company that was accountable not only to shareholders but to the media, in a recent call reporting Tesla’s earnings, Musk “cut off the questioners and in some cases chastised them for asking things he didn’t like.”
Less than three months later, he shocked the financial world by proclaiming his intention to take Tesla private, presumably to free himself from the bothersome “dry” and “boring” questions financial analysts habitually ask him after an earnings report. Claiming he had secured the funding necessary for going private, Musk then found himself in the awkward position of having to reveal that the announced funding was (in his eyes) probable rather than certain.
Further complicating his situation, he apparently hosted American rapper Azealia Banks at his home for the weekend as he scrambled desperately to get commitments from investors. Banks broadcast to Twitter her not very flattering report of Musk’s handling of the investment situation. The legal and ethical ambiguity of the situation may constitute not just an impediment but, according to Columbia Law School Professor John C. Coffee Jr., “a very straightforward violation of Rule 10b-5” of the securities law — in short, securities fraud.”
Gizmodo relates the “rampant speculation that Musk, who is not exactly known for his wise judgement on what to tweet or not, was bluffing and all of Tesla’s announcements since have been an attempt to weasel their way out of a bad situation that could get the company in trouble with regulators.”
Stay tuned to find out whether Musk, with the financial resources of Saudi Arabia, takes over the planet(s) or ends up in federal prison.
Musk rarely follows the standard game plan in his business operations. The traditional model for high-tech businesses is to launch and grow to a size where growth and the volume of activity attained point to likely if not certain profitability, at which point the company goes public and the founders attain the ranks of the super wealthy. From that point on the company becomes a prominent feature of the stock market and earns the reputation of being a sometimes vacillating but highly visible pillar of the US economy and business culture. That is how it happened for Microsoft, Apple, Google, Amazon and Tesla itself.
Since its founding in 2003, Tesla has often been on the borderline of bankruptcy, but in 2009 it announced that with the sale of 109 Roadsters it had turned its first profit. In 2010 Tesla made its filing for its successful IPO. In reality, it has never made a profit, though analysts have regularly forecast an imminent profit and continue to do so. In that respect the company resembles Amazon, whose CEO consistently put growth and future positioning ahead of the need to prove profitability.
Musk’s move to go private, not as a result of impending bankruptcy but as a strategic decision, has delighted many analysts, but where it may lead nobody knows. Some think it may make Musk the master of the universe. On the other hand, Azealia Banks — who claims to have witnessed first-hand Musk’s current embarrassment with the law and the media — has said, “I could run Tesla better than he does.”
Back in February, we called Musk the master of hyperreality, or at least the co-chair alongside Donald Trump. The show goes on.
*[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news.]
The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.