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- Thread starter nycfan
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How the hell did the board vote yes for this???
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This is what scares me.
BillOfRights
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One of several things
This has been my thought. Why would the company approve this? Is the brand of Tesla still that tied to Musk? The car sales have falter because of Musk. I know they make more money on batteries and satellites than cars but those are not tied to a brand personality or so I wouldn't think. All I can figure is Musk has some sort of emerging technology legally tied to him or he has proof that large government contracts are solely tied to him. That is to say he is extorting the board.
How rich and connected are the board members? Is it possible they are able to gain a business advantage by being on the board of a company able to do that? Cui bono ain't necessarily just about Musk.
I don't have any specific knowledge of the makeup of Tesla's board, but often times the board members are essentially puppets of the CEO, particularly in the case of a company like Tesla that is so controlled by the majority owner. These folks just want to keep their cushy board seats and will rubber stamp anything the CEO wants to keep them.
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They had no choice. Tesla is so overvalued (PE Ratio is nearly 300x!!) that it is essentially a meme stock tied to Musk’s popularity right now. There is a much smaller but real company at the core based on current assets and diminishing performance, but if Musk walks, the meme stock craters.
There are a lot of performance milestones on this package that would mean vastly growing the market cap and to some extent getting the company’s actual value to meet or exceed its current meme stock value based on business metrics.
To get the total value of this contract, he has to meet all dozen milestones, including getting the market cap from $1.5 trillion to $8.5 trillion over the next decade. Each month f the steps unlocks another 1% of Tesla stock but they are increasingly tough to hit … and the stock would be locked up (he couldn’t sell it) for up to a decade.
—> https://www.wsj.com/business/autos/...3?st=mQqjfy&reflink=desktopwebshare_permalink
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They had no choice. Tesla is so overvalued (PE Ratio is nearly 300x!!) that it is essentially a meme stock tied to Musk’s popularity right now. There is a much smaller but real company at the core based on current assets and diminishing performance, but if Musk walks, the meme stock craters.
There are a lot of performance milestones on this package that would mean vastly growing the market cap and to some extent getting the company’s actual value to meet or exceed its current meme stock value based on business metrics.
To get the total value of this contract, he has to meet all dozen milestones, including getting the market cap from $1.5 trillion to $8.5 trillion over the next decade. Each month f the steps unlocks another 1% of Tesla stock but they are increasingly tough to hit … and the stock would be locked up (he couldn’t sell it) for up to a decade.
Have they figured out how to actually make money from AI yet? Kinda like in the first decade of Amazon, there really weren't any profits but the stock zoomed up based on speculation about the potential future profits. Seem like Amazon had an unreal PE ratio back then, like over 300 or something.
sunnyheel
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The scam is in the plan.
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depends on structure but generally, no, not tax free — but these are restricted units, so the ordinary income tax won’t be due until they fully vest (when the shares are unlocked) — in 7.5 to 10 years. Then he would owe capital gains on the value in excess of the vesting price when he sells the shares.
1moretimeagain
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IMO $8.5 trillion market cap seems like the toughest one to meet.