Doug Field is back at Apple – TeslaWeekly

Doug Field is back at Apple

From John Gruber (daring fireball.net):

Here’s some interesting hiring news I’ve heard through the little birdie grapevine:1 Doug Field — who left Tesla in May after overseeing Model 3 production — has returned to Apple, working in Bob Mansfield’s project Titan group. Apple spokesperson Tom Neumayr confirmed with me only that Field has returned to Apple, but no one should find it surprising that he’s working on Titan.

Doug Field who oversaw Model 3 production knows more about the Model 3 vehicle and production process than almost anyone at Tesla, besides Elon.  And know, just a couple months after leaving Tesla, he is back at Apple and supposedly working on Apple’s car project.

I can’t imagine Elon is very happy about this.  Doug Field was a trusted lieutenant for Elon, and someone he relied on heavily in many regards.  And now Doug Field has left to go to Apple to make a possible competing car.

Gruber also makes an interesting point:

But I think it’s an interesting hire, primarily because it suggests to me that Apple still has an interest in making actual vehicles, despite reports that the company has scaled back the project to merely make autonomous systems for inclusion in vehicles made by other companies. That rumor never really made sense to me anyway — Apple’s modus operandi has always been to make the whole widget. Apple makes products, not components.

In other words, Apple is not about making a component of the car like the infotainment or the autonomous driving function.  Rather, Apple’s approach is to make the product, meaning the car.

Though probably unlikely, I do wonder with Apple hiring Doug Field so quickly, Elon also was also about to find out more about Apple’s plans.  And while I’m sure Elon is confident Tesla can withstand and beat out Apple in the car business, still there might be some concern over how the public markets might react when Apple releases a car and how much it might hit TSLA stock.  As a private company, Tesla’s private valuation would likely more more stable and somewhat insulated from events that tend to influence public sentiment.







Elon’s surprise

This morning Elon Musk announced that he is planning on taking Tesla private.

While this may be a shock to many, Elon’s rationale is quite clear and compelling. He would like to see less distractions and less short-term thinking for Tesla and he thinks that removing Tesla from the public stock market will accomplish this.

To understand Elon’s rationale, one must understand the plethora of propaganda attack that Tesla has been under over the past year. It’s been evident to many that there’s been a coordinated and efficient plan for those wishing to see Tesla fail to tarnish Tesla’s image and to hurt their chances of success. (Read this post about short sellers by jesselivenomore on TMC, https://teslamotorsclub.com/tmc/threads/elon-musk-vs-short-sellers.118431/).

Over the past several months, I’ve been suggesting that Tesla has been losing the narrative around their company and story.

It turns out Elon has another plan to turn the narrative around. And his plan is if he takes Tesla private, then the negative propaganda around Tesla fed by short sellers will stop and this will ultimately benefit Tesla and their mission. Further, Tesla will be able to return to the public stock market at a future date, if needed.

I understand Elon’s plan and the reasoning behind it. In my opinion, Elon just wants to make amazing cars and change the world. He doesn’t have much interest in constantly defending Tesla in the media against a propaganda war. To Elon, all of that is just distraction. And Elon further isn’t seeing a lot of benefit of needing to deal with the fluctuating stock price, testy analysts, and quarterly expectations. Simply put, in Elon’s thinking if Tesla were to be free of all those pressures, they would be better in executing toward their mission.

And so, starting today we start the journey of Tesla possibly going private.

Going private is not a done deal since it needs to have shareholder vote for approval. However, with Elon holding 20% of the shares (thus 20% of the vote), he may only need another 31% or so, which would be fairly easy to obtain (in my opinion), unless he chooses to recuse himself from the vote.

According to Elon, in the event that Tesla goes private, all current shareholders would be transfer their shares to ownership in the new company. Elon tweeted, “My hope is all current investors remain with Tesla even if we’re private. Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelity’s SpaceX investment.”

It’s going to be interesting to see TSLA stock price over the next weeks. As the proposal to take Tesla private goes to shareholder vote, those who’ve sold the stock short (35 millions shares) will need to cover (or buy back the shares). We might yet see the “short burn of the century” that Elon alluded to several weeks ago.

All in all, Elon’s announcement today was one of the biggest he has ever announced and will have major ramifications for Tesla and TSLA investors going forward.




Taking Tesla Private (blog post by Elon)

(published by Tesla at https://www.tesla.com/blog/taking-tesla-private)

The following email was sent to Tesla employees today:

Earlier today, I announced that I’m considering taking Tesla private at a price of $420/share. I wanted to let you know my rationale for this, and why I think this is the best path forward.

First, a final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best. As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders. Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term. Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company.

I fundamentally believe that we are at our best when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we’re all trying to achieve.

This is especially true for a company like Tesla that has a long-term, forward-looking mission. SpaceX is a perfect example: it is far more operationally efficient, and that is largely due to the fact that it is privately held. This is not to say that it will make sense for Tesla to be private over the long-term. In the future, once Tesla enters a phase of slower, more predictable growth, it will likely make sense to return to the public markets.

Here’s what I envision being private would mean for all shareholders, including all of our employees.

First, I would like to structure this so that all shareholders have a choice. Either they can stay investors in a private Tesla or they can be bought out at $420 per share, which is a 20% premium over the stock price following our Q2 earnings call (which had already increased by 16%). My hope is for all shareholders to remain, but if they prefer to be bought out, then this would enable that to happen at a nice premium.

Second, my intention is for all Tesla employees to remain shareholders of the company, just as is the case at SpaceX. If we were to go private, employees would still be able to periodically sell their shares and exercise their options. This would enable you to still share in the growing value of the company that you have all worked so hard to build over time.

Third, the intention is not to merge SpaceX and Tesla. They would continue to have separate ownership and governance structures. However, the structure envisioned for Tesla is similar in many ways to the SpaceX structure: external shareholders and employee shareholders have an opportunity to sell or buy approximately every six months.

Finally, this has nothing to do with accumulating control for myself. I own about 20% of the company now, and I don’t envision that being substantially different after any deal is completed.

Basically, I’m trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible.

This proposal to go private would ultimately be finalized through a vote of our shareholders. If the process ends the way I expect it will, a private Tesla would ultimately be an enormous opportunity for all of us. Either way, the future is very bright and we’ll keep fighting to achieve our mission.

Thanks,
Elon