Musk has made Tesla a meme stock
Although Tesla appears to be wildly overvalued compared to rival carmakers, its shareholders are betting that they can sell their holdings to a greater fool soon, and Elon Musk is eagerly indulging their speculative exuberance. None of it bodes well for Tesla’s workers, suppliers, and other customers.
[BERKELEY] From the standpoint of America and the world, Tesla is a historically important technology-generating enterprise – the tip of the spear in the transition away from internal-combustion-engine vehicles.
From the standpoint of long-term shareholders, it has the potential to be a sustainable profit-making enterprise. From the standpoint of its suppliers, employees, and customers, it is a source of income and production. And from the standpoint of Wall Street speculators, it is a bouncing ball in a roulette wheel: a tech-bubble casino play.
In early 2018, Tesla’s board of directors and shareholders approved a pay package for CEO Elon Musk granting him 12 tranches of stock options, each equal to about 1 per cent of the company’s total equity, valued fully at some US$55 billion. The first tranche would vest if Tesla’s market capitalisation surpassed US$100 billion, and each successive tranche would vest when it rose another US$50 billion (provided that the company also met various revenue and cash-flow targets).
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