A Billion-Dollar Love Story: How Tesla "Put a RING on It" with Elon Musk

This summer, Tesla’s shareholders made an unlikely proposal to their company’s CEO, Elon Musk: a grant of company shares is worth far less to you personally than it is to us as a company. As a result, let’s give you $46 billion worth of Tesla shares. We should never even think about making our relationship conditional again. It would be like putting a ring on it. The board of directors did this for Tesla, not for themselves. Musk is the company’s pivotal figure, and the board wanted an ‘exclusive’ relationship with him. Tesla has faced an unexpected glut of unsold vehicles this year, and the price of its stock has fluctuated wildly Let’s call it what it is. This is a Big Love story. Beyond all the conventional wisdom and hard-nosed financial realism, this is a story of religious conviction and romantic futurism that is simply worth its weight in stock options. Let’s begin untangling this billion-dollar romance.

Engaging the Future: Musk's $46 Billion PLEDGE

The sheer scale of the stock grant that Tesla shareholders gave to their capricious chief executive, Elon Musk, provides tangible evidence of the special and sometimes contentious leadership he provides. While his volatile decision-making is cited by many as a liability, this huge gesture underlines the company’s trust in his vision of what comes next. Incidentally, as we write, the true value of the grant has been repeatedly buffeted by the changing fortunes of Tesla’s stock price, and Musk has not disappointed his critics. However, Tesla’s gesture is an expression of a faith in Musk that is deep and also dangerous.

Unsold Teslas: A Cloud with a Silver LINING?

The company’s Tesla-era financial narrative has recently done a 180 with an inventory pile-up awaiting future sales. Following the logic of ‘a stock for every forsaken car’, the inventory blowout is all of a sudden giving us an interesting valuation trick – where Musk’s stock grant comparator now is the inventory pile-up awaiting future sales. Yet, in spite of it all, this grim tale now has a chance of reversing course: it is revealing Tesla’s manufacturing abilities and market ambitions after all.

The Cybertruck Saga: A Motif of Ambition and Adversity

The Cybertruck is perhaps the most visible artefact of Tesla’s uphill and troublesome path towards Musk’s vision. With sales and recalls becoming the main battlegrounds of praise and criticism, the case of the lumbering soap-punk truck is an accelerated version of the vehicle empire’s life story. With its telltale promise of great things to come, childlike enthusiasm for the Cybertruck is only the latest iteration of Musk’s faith in the ultimate victory of the underdog over sceptics.

Corporate Culture or Cult? Deciphering the Tesla Shareholder Meeting

At the recent Tesla shareholder meeting, against a backdrop of recent controversies and the looming threat of bankruptcy, Musk’s enigmatic, almost sullen vibe was starkly contrasted by the audience’s effusive endorsements, as if their unwavering faith in Musk’s leadership was akin to a cult of personality. Consequently, Musk’s cryptic hints about future products, from the Optimus robot to future Teslas, elicit whimsical glee from Musk devotees and deep-seated skepticism from analysts.

Navigating the Political and Social Minefield

Tesla’s recent developments have led to more than a just-the-facts discussion about the company’s financial affairs. Musk’s social media antics and decisions around Tesla’s board of directors have led to questions about whether the company’s management and its customer base are on the same page about representing values that the customer base respects. But Tesla’s history and Musk’s personal development, while winding and fraught with triumphs, disappointments and scandals, are ultimately based on envisioning a future as unlike today’s as possible.

The RING That Binds: Understanding Tesla's Commitment to Elon Musk

Start with the ring, as they say; by paying Musk $46 billion worth of stock in their union, Tesla has chosen to emphasise – to its shareholders and the world – that the company’s engagement to Musk is more than a wager. Tesla believes in its man. Together, this couple will face the risks of marriage, but also reap the rewards. The world may damn them; they don’t care. This union is about a shared destiny, about a shared ‘belief in the future’ – in this case, a shared future that could see unparalleled innovation, previously unimaginable value, and unqualified success. Tesla is doubling down on Musk.

Wring Up: The Essence of the RING

Of course, Tesla’s ring was less about business (signed, sealed and delivered) than it was about belief. How could it be otherwise, given the decision to put a $46 billion rock on a guy’s finger that says WE ARE GOING TO BUILD BETTER THINGS IN A WORLD THAT WILL BE NOTHING SHORT OF BRIDGE-OVER-DESOLATE STORMY? Tesla and Musk are in for some stormy periods ahead, weathering the slings and arrows of public indignation, market vagaries and the usual internal craziness of risky tech startups with a lot of moving parts. But this ring? I’m betting that things are going to be all right. If nothing else, this is a company and an entrepreneur who have pledged to ride out whatever storms get thrown their way, together, on the road to wherever the future of transport and tech will take us.

Jun 14, 2024
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