Photo: Stefan Baldauf / Guido ten Brink
This past week, thanks to the Mondial de l'Auto 2018 opening its doors in Paris, we managed to take some time off from writing about Tesla stock, Elon Musk, his tweets and the SEC.
But because nothing seems to be breaking this man, or the businesses he put together over the years, we just had to come back to this topic.
And we’ll start with a theory: Tesla Motors is indestructible. Something like M. Night Shyamalan’s David Dunn. And a lot more real, too.
Ever since August, Elon Musk has been riding a rollercoaster he himself set in motion. This rollercoaster started taking him on a more and more dangerous ride in the past two weeks, as he has been charged by the SEC with fraud, settled with the watchdog, has been banned from being chair of Tesla for the next three years and fined, together with the company he leads, $40 million.
And all because of a tweet he made back in August, fed up with bears, short sellers and stock in general, and encouraged by a few private meets with some Saudi rich folk, which left him with the impression he would be financially backed to take the electric carmaker off the public market.
When hearing Musk will no longer be chair of Tesla – he is allowed to continue as CEO, though – one would have thought Tesla’s stock would take a hit, crash and burn, plummet to oblivion. Because, as you all know, the price of a Tesla stock is said to include a sizeable Musk-premium, a value added to the price only because Musk, the pioneer that he is, is behind the project.
The reality proved this theory wrong, at least at some level. The stock did take a hit (dropped by 16 percent after the SEC announcement), but only for a day or so. According to Institutional Investor, citing a director S3 Partners, “bearish speculators booked a one-day paper profit of approximately $1.4 billion on the back of Friday’s price action.”
The price then rebounded with incredible force, fueled by the sales numbers posted by the company, regaining the lost ground and then some. It is currently fluctuating on the market, but not enough to cause serious concerns.
This could mean only one thing: Tesla, at least as far as investors perceive it, is a company mature enough to conduct business without its creator at the helm. A company which, if helped to successfully navigate the treacherous waters of car production – might grow to an impressive size in the future.
As some of you still remember, Tesla went public in 2010, with the stock price during the initial public offering being $17 per share. Musk’s business model, the products he sold and the overall sense of bright future he presented helped the stock climb steadily ever since. So much so, that a potential investment of $1,700 in 2010 was worth $31,000 on October 1, 2018.
The rapid growth, as well as the proven relative stability of the stock, shows that investors trust Tesla and its future.
On their part, short sellers remain hopeful that Musk’s issues with the SEC will continue. And their hope is founded, given the fact that Musk, having also been ordered by the SEC to have his public comments overseen by more stock market-savvy individuals, hasn't stopped mocking their kind.
In a tweet posted on Thursday, Musk seemed to accuse the SEC of helping shortsellers get rich.
"Just want to that the Shortseller Enrichment Commission is doing incredible work. And the name change is so on point!" he said, missing at least a word in the phrase.
But despite the aggressive bearish moves on the market, or maybe because of it, Tesla survived. And despite its founder's at times irresponsible behavior, Tesla now seems to be on a track solid enough to handle anything thrown at it.
Tesla survived because the company now seems to have grown beyond its creator, becoming a fully functional entity in its own right.
And we’ll start with a theory: Tesla Motors is indestructible. Something like M. Night Shyamalan’s David Dunn. And a lot more real, too.
Ever since August, Elon Musk has been riding a rollercoaster he himself set in motion. This rollercoaster started taking him on a more and more dangerous ride in the past two weeks, as he has been charged by the SEC with fraud, settled with the watchdog, has been banned from being chair of Tesla for the next three years and fined, together with the company he leads, $40 million.
And all because of a tweet he made back in August, fed up with bears, short sellers and stock in general, and encouraged by a few private meets with some Saudi rich folk, which left him with the impression he would be financially backed to take the electric carmaker off the public market.
When hearing Musk will no longer be chair of Tesla – he is allowed to continue as CEO, though – one would have thought Tesla’s stock would take a hit, crash and burn, plummet to oblivion. Because, as you all know, the price of a Tesla stock is said to include a sizeable Musk-premium, a value added to the price only because Musk, the pioneer that he is, is behind the project.
The reality proved this theory wrong, at least at some level. The stock did take a hit (dropped by 16 percent after the SEC announcement), but only for a day or so. According to Institutional Investor, citing a director S3 Partners, “bearish speculators booked a one-day paper profit of approximately $1.4 billion on the back of Friday’s price action.”
The price then rebounded with incredible force, fueled by the sales numbers posted by the company, regaining the lost ground and then some. It is currently fluctuating on the market, but not enough to cause serious concerns.
This could mean only one thing: Tesla, at least as far as investors perceive it, is a company mature enough to conduct business without its creator at the helm. A company which, if helped to successfully navigate the treacherous waters of car production – might grow to an impressive size in the future.
As some of you still remember, Tesla went public in 2010, with the stock price during the initial public offering being $17 per share. Musk’s business model, the products he sold and the overall sense of bright future he presented helped the stock climb steadily ever since. So much so, that a potential investment of $1,700 in 2010 was worth $31,000 on October 1, 2018.
The rapid growth, as well as the proven relative stability of the stock, shows that investors trust Tesla and its future.
On their part, short sellers remain hopeful that Musk’s issues with the SEC will continue. And their hope is founded, given the fact that Musk, having also been ordered by the SEC to have his public comments overseen by more stock market-savvy individuals, hasn't stopped mocking their kind.
In a tweet posted on Thursday, Musk seemed to accuse the SEC of helping shortsellers get rich.
"Just want to that the Shortseller Enrichment Commission is doing incredible work. And the name change is so on point!" he said, missing at least a word in the phrase.
But despite the aggressive bearish moves on the market, or maybe because of it, Tesla survived. And despite its founder's at times irresponsible behavior, Tesla now seems to be on a track solid enough to handle anything thrown at it.
Tesla survived because the company now seems to have grown beyond its creator, becoming a fully functional entity in its own right.
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