Is Musk a Risk for Tesla?
1.
“We need to get Elon Musk out of Tesla.”
This claim has been raging in the US lately.
Elon Musk is the founder, Alpha and Omega of Tesla.
Tesla rarely does publicity or advertising, because the person named Musk is doing the role alone.
In addition
, it is also the largest shareholder with a 13.4% stake in the company.
But we want to send such a person out.
The problem is the stock price.
Tesla stock has fallen 66% in one year.
In terms of amount, 672 billion dollars, or 860 trillion won in our money, has disappeared.
Suddenly, he spent 54 trillion won to buy Twitter, fired a large number of employees, and sold Tesla shares saying he needed more money.
In a situation where a new electric car model was not released and the market dominance was collapsing, complaints began to emerge because the CEO seemed to be doing something else.
At first, there was an order to quit the Twitter CEO and focus on Tesla, which is the main business, and then it led to demands to leave Tesla.
Rio Koguan, the third largest individual shareholder with 4.4 trillion won worth of Tesla shares in our money, is a representative figure.
Until the summer, I bought Tesla because of Musk, and Tesla is an investor who has fully supported Musk as a company that lives and dies for Musk.
But in December, things change.
"Elon has abandoned Tesla and Tesla has no current CEO.
Tesla needs and deserves a current CEO who works full-time.
What should the Tesla board do? You will find it."
Once I burst into speech, I can't get my hands on it.
“Why do you ask me why? Because Tesla is important.
Elon
Musk is just a worker.
He is
our employee.
We need an enforcer (resolute executive)"
Investors large and small followed suit.
When the stock price was good, Musk's various eccentricities were forgiven, but that's not the case anymore.
Eventually, in the new year, Tesla's board raised Tom Zhu, a Chinese-New Zealander who was the general manager of the Chinese business, to the company's second position.
He was assigned the role of overall responsibility for the US plant and sales operations in North America, Europe and Asia.
And finally, there is also an article that Tom Ju can replace Musk's CEO position.
Now, I'm curious here.
Is it possible for the founder and largest shareholder to be pushed out of his company by someone else's hands?
2.
To start with the answer, it is possible in the United States.
In fact, quite a few such things have happened.
The most representative example is, Steve Jobs was kicked out of Apple, which he created.
Steve Jobs created Apple in 1976 at the age of 21 and made it public in 1980 when he was 25 years old.
He wanted to run the business himself, but he decided to wait a little longer.
So he brings in the persona of 44-year-old John Scully, who in 1983 was the youngest person ever to become Pepsi-Cola president.
He's the man who drove Coca-Cola into a corner by creating marketing that compared flavors with eyes closed, saying "Pepsi tastes better."
"Do you want to spend the rest of your life selling sugar water? Or do you want to seize the opportunity to change the world?"
And Steve Jobs goes down to the position of 'General Product Manager'.
But two years later, this John Scully kicks out Steve Jobs.
Scully believed the company would have to sell more of its existing model, the Apple 2, to remain profitable.
But Jobs believed it was time to push the super-expensive Macintosh he had developed (the prototype for the Mac now).
He claims, "I'm not trying to make money, I'm trying to come up with a revolutionary product."
Scully decided that money was money, but Jobs' erratic and tyrannical personality was ruining the company and its employees.
So he calls a board of directors, fires Steve Jobs, and ties the business to basic research.
At the time, Jobs was still the largest shareholder, holding 11% of the company's stock.
So prepare for a counterattack.
To get rid of Scully.
A month later, at an executive meeting, he asks Scully to leave.
But all the executives are on Scully's side.
He said to his face, "Jobs, you're not ready to run a company yet."
Jobs is eventually fired from the company in a humiliating way, by handing in his resignation.
At that time, Steve Jobs sold all of his Apple shares, leaving only one week left so that he could attend the shareholders' meeting whenever he wanted.
Bill Gates is currently the world's 4th richest person, but the reason why Steve Jobs did not enter the world's 100th richest person until his death is because of this decision.
Now, by the way, I'm curious here.
How could the largest shareholder and founder get kicked out, who the hell could do such a thing?
3.
The secret lurks in the company's board of directors.
Boards of public companies in the United States usually consist of five or six directors.
It is also customary for the chairman of the board of directors to be someone other than the CEO.
The current chairman of Tesla's board is also not Musk.
Directors also have legal and moral responsibilities to shareholders.
Since you are in charge of managing other people's investments,
you have to make decisions that serve the interests of all shareholders, not the interests of the largest shareholder or your own.
If you are judged for violating this duty, legal problems may arise later and your career may end with the stigma of 'management failure'.
So, no matter how much the founder is, if the company gets in the way of growth, the board can kick it out.
On YouTube, there is a video of John Scully himself, who made the decision to kick out Steve Jobs, looking back at the situation at the time.
From 4:30 onwards he says:
“As a professional executive, I had to think about how the shareholders would react, how the analysts would react… The board was at fault. They understood Apple before I came, and Steve knew it. I believed it… I said to Steve, “Hey, this company is yours.
it's not mine
you can take it back
But I wouldn't be here as a manager then.
And no decision can be made without a board vote."
After listening to the explanation, I realize that because of this structure, I was able to send Jobs out, and Jobs eventually had no choice but to accept it.
4. So in the United States, the largest shareholder is kicked out of the company.
Everyone knows the pizza company Papa John's, right?
The company's founder, John "Papa" Schnatter, was even kicked out of the company that bears his name.
The face attached to the pizza box was also erased.
It's like being Papa Johns without Papa.
In 2017, the "Black Lives Matter" movement took place in the United States.
Even on the football field, when the US national anthem was played, players knelt down to express their protest.
However, at this time, it was revealed that Schnatter criticized these black players at an internal meeting by using swear words that began with the letter 'n'.
He said, "We're the NFL sponsors, but people don't watch the games because they don't want to see these XXs, and they don't see our ads, so sales are down."
The company is in crisis, and the board steps in.
They kicked out Schnatter, the founder and chairman of the board at the time, who owned 30% of the stock.
Schnatter tried all sorts of things to sue, but failed, and now he's selling most of his stock and telling the board of directors with curses like "let's see if it works without me."
5.
Musk is also likely to be kicked out if it is concluded that Tesla is an obstacle to becoming a bigger company.
So far, the board has not reached any conclusions.
In November, he also put out a position that "Musk is an irreplaceable CEO."
However, as we saw in the rebellion of the three largest shareholders, it is also true that the level of risk is gradually increasing.
Currently, the Tesla board of directors consists of Elon Musk himself, his younger brother, and other close people, but just as Jobs was all close to him when he was kicked out of Apple, it is impossible to predict what conclusion it will lead to.
So,
what will happen to Tesla's share price if Musk steps down?
Let's find the answer by looking at the examples of Apple and Papa John's.
In 1985, on the day it was announced that Steve Jobs was leaving the company, Apple's stock rose nearly 7%.
When Papa John's left the company in 2018, it was up 11%.
If the market decides that it is more beneficial for shareholders to have another CEO in place of Musk, Tesla stock is equally likely to rise initially.
However
, it is very difficult to judge in the medium to long term.
Apple's stock price was 7 cents a share in 1985 when Steve Jobs left, but it was staying at 17 cents in 1997 when Jobs returned.
After Jobs, CEOs couldn't show a bigger vision, and Jobs, who eventually returned, recreated Apple now.
After that, the stock price is as you can see.
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