With Tesla approach, Musk shows that resistance is not so futile
Much of the nation watched with pride on Saturday as SpaceX’s Crew Dragon hurtled toward outer space against a flawless blue sky in Florida. The first successful launch of U.S. astronauts from American soil in nine years, which was also the first private-sector manned venture into space, iced the cake on Monday with a successful docking at the International Space Station.
Thus, for the moment, SpaceX founder Elon Musk claims special standing among our innovators and visionaries.
But as Forbes magazine noted last week, it was Musk’s resistance to California’s lockdown order over his other primary business venture — Tesla — that proved extremely profitable.
Back in April, in a call with shareholders, Musk had blasted shelter-in-place orders as “fascist,” and denounced “forcibly imprisoning people in their homes against all their constitutional rights.”
“This is not democratic. This is not freedom. Give people back their g–damn freedom,” he ranted.
Musk, incensed about inflexible Alameda County officials, said he would reopen his Tesla factory in defiance of the orders, and encouraged authorities to arrest only him if they came for violators. Musk also claimed he was considering pulling Tesla out of California in favor of Texas or Nevada.
State Assemblywoman Lorena Gonzalez, a Democrat, offered a terse response: “F— Elon Musk.”
Musk, however, prevailed. His factory remained open and he was not harassed by local officials.
Forbes columnist Jack Kelly noted last week how this tough stance paid off for Musk.
“Musk had in his contract a clause that offered him a substantial bonus if he kept the market value of Tesla stock at a certain level for a prescribed period of time. Musk received the right to purchase about 1.688 million shares of Tesla stock at a price of $350.02. Thursday’s closing price was $805.81. If he exercised his options, it would’ve yielded an immediate $770 million gain. This tranche is part of a larger, multibillion-dollar package. Now, we know that there was an ulterior motive to this public drama,” Kelly wrote.
“If the manufacturing plant was shut down, things would have turned out poorly for Musk. The media would broadcast that the Tesla factory wasn’t producing cars. If cars are not made, they can’t be sold. If they’re not sold, revenues stop and any hopes of profits evaporate. The stock price would most likely plummet, as the company would find itself in a tough financial situation. The fall in value of the stock price would render the multimillion-dollar option worthless.”
“Musk,” Kelly concluded,” is playing five-dimensional chess, while we’re all playing checkers and sheltering in place.”
We’ve paid a terrible price as a nation in terms of diminished wealth and health because of the lockdowns. Although there was a big personal payday in it for him, Musk also had more than 10,000 everyday folks on his payroll who had families to feed, and his rejection of his lockdown overlords enabled them to do that. We should credit Elon Musk for saying enough is enough, and hope more will follow.
Scroll down to comment!