Tesla Motors Inc CEO Elon Musk probably doesn’t need a lot more money, but when he gets his salary from the electric vehicle company, it could be a little cheaper. Assuming his check arrives once a month, Mr. Musk cashes a little over eight cents each pay period, but he won a lot more.
Mr. Musk, when Tesla Motors was in financial difficulty, agreed to receive a token salary of $ 1 in order to save the company the expense of supplying its refrigerator. He still owns the largest share of the company, with around 23% of the shares held under his name. This is interesting given the announcement he made last Friday.
Elon Musk driver Tesla Motors
The last time Mr. Musk reported his ownership to the SEC on February 13, 2015, he held 35,528,859 Tesla Motors shares and call options of 7,240,162. Without these exercised options, he owns approximately 23 percent. of the company.
So far in 2015, Mr. Musk’s stake in Tesla Motors has appreciated to over $ 8 billion. It started the year at around $ 6.3 billion. Mr. Musk earned $ 1.8 billion in net worth through the rise in the value of the company. Tesla Motors shares rose sharply on Friday after Mr Musk provided some fairly minor updates in a phone event that took attracted a lot of attention.
After more than one meeting was called within a fairly short timeframe earlier this year, some have started to question Mr Musk’s motives. While his efforts have undermined growth in Tesla’s share value in the past, it seemed like he was more concerned with the stock price in 2015.
Mr Musk was forced to defend himself earlier this year. He tweeted “Some people seem to think I’m tweeting to affect the share price. It’s wrong. A brief rise in $TSLA the stock obviously doesn’t do Tesla or me any good.
Company events are similar to tweets. Tesla Motors has turned many mundane revelations, like last Friday’s acceleration, into major media events. With his cultural influence, he attracts a lot of press attention when he does trivial things like announcing that a software update comes months later.
Handling Tesla Motors Shares
Traders know that a brief jump into Tesla Motors the stock is not what Mr. Musk is looking for, and he was dishonest in denying this straw man. Mr. Musk has been accused of manipulating the share price, not in the long term, but in the short term.
Last Friday’s odd announcement was a perfect example of the turn Mr. Musk likes to give to stories. Two relatively straightforward model upgrades, a new 90 kWh option and a cheaper 70 kWh option were added at the event.
Another feature, Ludicrous mode, was arguably a lot more worthy of a title. He’ll get a Tesla with the right 0-60mph upgrade package in 2.8 seconds.
The event came just as Tesla Motors shares had lost momentum due to a number of Wall Street reports that called its value “full” leading to the release of the Model X.
The situation was the same last spring before Tesla announced that the self-driving car update was in the works and then launched a battery product that appears to be far enough from commercial application.
Although the PowerWall has been praised by many on Wall Street, the date of shipment has not been made clearer than “this summer”. With so many launch delays behind the Model X and other projects, it’s unclear whether Mr. Musk is likely to meet that unclear date.
Those who think Mr. Musk’s behavior is less than honest don’t think he’s looking for one-day spikes, they think he’s looking for keep the momentum behind the stock so that the news cycle that follows it, and the interest of traders, does not slow down.
Tesla Motors actions reflect a history
Jim Cramer is calling Tesla Motors a stock of history, and most Wall Street would agree, at least in part, with this conception of how stocks trade. Tesla also has a story product, however. People buy a Model S for many reasons, but the main one is how innovative and exciting it is.
A 2014 Consumer Reports survey of brands in the automotive world found Tesla Motors to be considered the most innovative. The Model S wasn’t particularly fuel efficient in the eyes of those who took the survey, but it was doing something new.
Tesla Motors on Friday tried to market itself as a company that keeps changing and getting better. Mr Musk told those on the call, “If you want to wait to buy a car until there isn’t a better one in the future, you’re going to wait forever.” He says the Tesla Motors team makes about 20 small changes to the design of the Model S every week.
The cheaper 70 kWh Model S showed that power cells were getting cheaper. The 90 kWh Model S has shown that the technology around cars is improving. The ridiculous mode showed that the company still has a flair for the dramatic and performance oriented.
The story Mr. Musk wants to tell about Tesla Motors is strongly tied to the company’s stock price. When he tries to recall or change the media image of the company, like he did last Friday, he also changes how traders think about the stock.
Check cashing at Tesla Motors
Elon Musk doesn’t have much base salary to fall back on at Tesla Motors . Despite the recent surge in the dollar’s value, $ 1 isn’t worth much in Mr. Musk’s circles. He relies on the value of his 23% stake in the company to make his time worth it.
Elon Musk may not like it when the Tesla Motors stock is relying on his words to keep moving forward, but, for now at least, it does. So far this year, he’s managed to find his way to a $ 1.8 billion paycheck.
It is not because he has been handle the stock, that’s because he paid attention to the whole history of Tesla Motors, filling it in and smoothing it out in the right places.
If the company’s shares are so out of whack by the market that they trade on the basis of this type of marketing, that cannot be blamed on Mr. Musk. If he wanted to sell part of his stake, he probably couldn’t justify it given the sale it would entail.
Mr. Musk’s net worth has become very dependent on the kind of story he is able to tell in the market. This situation will continue until Tesla Motors manages to generate profit and it probably won’t happen until 2020. Only if this part of the story is told by Elon. turns out to be true.