I’ve a advice for Tesla shareholders: Vote no.
The board promised Mr. Musk — at his urging — that if he made the board and the shareholders really rich by boosting the inventory worth, by no matter means, he might have 12 % of the corporate. But I imagine this pay bundle helped drive his descent from visionary enterprise chief to weird carnival barker. And that set of incentives and responses shouldn’t be validated.
Right here I have to again up and inform you what meme shares are. The usual instance is GameStop, an organization that runs about 4,000 online game and electronics shops. Buying and selling at $5 a share in the beginning of December 2020, its worth rose to a staggering roughly $150 a share on the finish of January 2021. Mr. Musk joined the enjoyable by tweeting one phrase — “Gamestonk!!” — and the shares soared to $483 two days later, earlier than starting an extended, jagged decline. As of the beginning of 2024, it was nearly $17 a share, far above the $5 of 2020, although nothing a lot had modified about its (struggling) enterprise. And a latest revival of GameStop mania has since pushed it as much as $30 a share.
Who’s behind all of this loopy? It isn’t individuals who need to spend money on a slice of Gamestop’s enterprise over the long run. It’s, quite, that people who find themselves shopping for GameStop as a means of pledging allegiance to an concept, a meme, a cultural-technological motion of some form — and some hoping to get wealthy by tagging alongside and promoting on the prime. Previous inventory manias and bubbles concerned individuals who believed that the corporate concerned can be worthwhile or no less than that they might have the ability to become profitable promoting their inventory to a larger idiot than them who had simply arrived within the market and nonetheless believed. However GameStop inventory grew to become all however disconnected from the profit-and-loss statements of the 4,000 GameStop shops.
And so it has grow to be with Tesla. It was not about getting higher at making high-quality electrical automobiles for which there was robust demand. For Mr. Musk, incentivized by his pay bundle, it grew to become a couple of inventory worth that should go up.
After 2018, Mr. Musk went all in. He made noise, notably on Twitter. He nonetheless overpromised, however he not overdelivered; as a substitute he jumped from moonshot theme to moonshot theme to spice up the meme-stock affiliation of Tesla. Humanoid robots! Cybertrucks! Fleets of Tesla robotaxis! A synthetic intelligence supercomputer whose mind can be all of the idle Teslas on the planet, networked! And the share worth did zoom, making him the richest man on earth, from about $20, give or take, round 2018 to over $400 in late 2021 earlier than starting a jagged and infrequently interrupted decline to its nonetheless lofty $174.