Elon Musk and Tesla Dream

Elon Musk appears to be settling himself and the company up for the biggest disaster possible with his recent Tweets about taking Tesla private. Tesla has struggled to make production goals for quite some time and has failed to make a profit for years. As the demand has increased, Tesla has failed to make enough vehicles in a timely fashion to meet the demand.

Tesla's failure to meet demand and success in creating a wonderful vehicle has created opportunities for other high end auto makers to meet the needs of customers. Porsche, Volvo, BMW and other automotive companies have produced electric and hybrid vehicles that Tesla customers migrate to because they don't have the patience to wait 3 to 18 months to buy a vehicle. Tesla has failed also to perfect self driving in their vehicles when Nissan and others have employed radar to detect stopped objects for a few years. Tesla makes their cars upgradable, but they are about to be passed up by Google’s Waymo.

Tesla might not have too many improvements to make to their vehicles, but increasing production to achieve economies of scale should be the ultimate goal. Possibly Musk could argue that is what they are trying to do with new factories in China and Europe. Tesla increasing production is the most important thing the company must improve. By Tesla operating as a public company it has a public responsibility to shareholders to produce products as the most efficient way.

Elon Musk expects to run Tesla more efficiently as a private company doesn't make sense as they are in a completely different business than Space X which he says runs very well. Space X might be efficient launching a rocket once a month, but it is a business that must focus on efficiency rather than law of large numbers like a struggling car company must accomplish. Thankfully running Space X allows Musk the ability to generate income that he can back Tesla financially although he states they will continue to operate as separate entities.

Keeping Tesla separate is a good thing, but many people want to see Tesla succeed and if Musk wants to take the company private, many have expressed desire to get more than the $420/share price Musk Tweeted yesterday. That is a lot of money and based on that fact alone Tesla should be trading above $400/share. To accomplish the buy out would be a complete waste as the company has a large amount of debt obligations and is burning through cash. If Musk has enough cash to take the company private, he should use it to focus on making the company better and buyers will buy it and short sellers will be burned.

Elon Musk is too concerned with short sellers as I am sure his employees do not go to work wondering if the stock is going down big today. Short sellers do not have anything to do with the production of Tesla products. Improvements to the Tesla brand and increased production should be the only thing that Elon Musk should desire for Tesla. If he doesn't like answering questions of doubters then he should have it handled through a PR team so it doesn't waste his time.

That is how Tesla could be great and loved by most.