Elon Musk is no stranger to the public spotlight. Indeed, Musk has a zeal for publicity that is only (obviously) exceeded by a certain, unnamed political figure. Consequently, Elon Musk is also no stranger to controversy.
It is impossible to bask in the media scrutiny he receives without also being regularly exposed to negative press: criticism and questions that openly challenge Musk’s position on a multitude of issues. But he also courts controversy.
A case in point was a recent Tweet from this electric vehicle icon:
"Am considering taking Tesla private at $420. Funding secured."
For obvious reasons, the quote drew massive, immediate media scrutiny. It also attracted the attention (and wrath) of regulators, as indicated by this CNBC headline:
Tesla likely to face SEC investigation following Musk tweets amid debate of market manipulation
Market manipulation? CNBC elaborated.
Musk risks both civil and possible criminal penalties if he doesn't actually have funding lined up, securities lawyers say.
Understandable. If Musk did not have any funding source lined up – but began openly “speculating” about going private at a significant premium to Tesla’s current market capitalization – then it is easy to see how and why Musk would face a barrage of questions from hostile regulators.
Given the enormous stakes here, other media voices have weighed in. Wired Magazine penned an article titled What’s Driving Elon Musk? After noting that “[h]e’s one of the technology industry’s most high profile and controversial figures”, Wired led the article with an assessment that is as blunt as it is colourful.
Elon Musk is a science-fiction character. That’s how one friend puts it. In some ways, the CEO of SpaceX and Tesla is the archetypical cartoon billionaire – Tony Stark meets The Simpsons’ Hank Scorpio – with the rockets, the rollercoaster personal life and the fast cars – one of which is currently speeding away from us at 13,000kph.
Is Elon Musk “a science fiction character”, or perhaps just crazy? In fact, this is part of the question in the latest Investor Pulse Poll on the Stockhouse homepage. But before the Stockhouse audience jumps to that poll to cast their own vote, readers should have a look at the latest headline being generated by Musk and Tesla.
On Tesla’s internal blog, Musk himself published the following article on Monday: Update on Taking Tesla Private. In addition to reiterating his tentative plans to take Tesla private, Musk squarely took on both critics and regulators by answering two rhetorical questions.
Why did I make a public announcement?
The only way I could have meaningful discussions with our largest shareholders was to be completely forthcoming with them about my desire to take the company private. However, it wouldn’t be right to share information about going private with just our largest investors without sharing the same information with all investors at the same time. As a result, it was clear to me that the right thing to do was announce my intentions publicly. To be clear, when I made the public announcement, just as with this blog post and all other discussions I have had on this topic, I am speaking for myself as a potential bidder for Tesla.
Why did I say “funding secured”?
Going back almost two years, the Saudi Arabian sovereign wealth fund has approached me multiple times about taking Tesla private. They first met with me at the beginning of 2017 to express this interest because of the important need to diversify away from oil. They then held several additional meetings with me over the next year to reiterate this interest and to try to move forward with a going private transaction. Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction.
Viewed in hindsight, Musk’s Tweet now appears perfectly reasonable, if (perhaps) overly theatric. At the same time, the Tweet has accomplished exactly what Musk is saying he wants to do: engage all of Tesla’s shareholders in an open and public dialogue about this potential move private.
Seen in this light, Musk no longer comes across as a science fiction character or some “crazy” Hank Scorpio-like chief executive whose only desire is to maximize his fame (or notoriety). In fact, Musk’s Tweet was arguably the fastest way to launch a public dialogue of this nature.
Both critics and fans of Elon Musk may view this man as “a science fiction character”, although likely for considerably divergent reasons. But for those who were questioning Musk’s sanity after his jaw-dropping Tweet from last week, his proponents now have a ready reply.
“Crazy like a fox.”