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The above helpful comments being said, my question now is, how long is he going to be able to run these companies separately without a shareholder revolt saying

The above helpful comments being said, my question now is, how long is he going to be able to run these companies separately without a shareholder revolt saying they should be put under one roof to create more value for the investors in Tesla? Right now it feels like I'm an unofficial investor in TeSpaceBoringLink as opposed to just the former. I expect to get some hate for the comment as it's a Wall Street type complaint, but to my eye, it seems like these companies are becoming ever more similar.

gpm 9y ago
SpaceX is an entirely separate company from Tesla, and not public. Investing in Tesla is not investing in SpaceX and Tesla shareholders have no rights to anything SpaceX does (absent contracts between Tesla and SpaceX) and the reverse. SpaceX shareholders (e.g. Google, Musk) would presumably be quite strongly against merging with Tesla. There's nothing stopping SpaceX from directly competing with Tesla if they wanted to. On what basis do you imagine shareholders revolting? How would you imagine them doing so?
- wonder_bread 9y ago
  I understand the legalities of how they're separate, what I'm saying is if the "cross-fertilization" approach between the two companies proliferates to the point where they are material to each other's operations, what's to stop Starboard or some other activist investor group from launching a campaign against them? Obviously, Elon would be against this, I'm not saying they would personally be for this decision, I'm saying if the market stops being as forgiving to Tesla as it is, could a group not gain significant voting power and push this against them?
  - deleted 9y ago
    [deleted]
- thomaskcr 9y ago
  > SpaceX is an entirely separate company from Tesla, and not public. Investing in Tesla is not investing in SpaceX That may be strictly true, but I think most people consider Elon's ownership and direction of Tesla a big part of what supports the stock's price. Enough of Musk's loans for SpaceX are backed by Tesla stock for that to get a mention in their 10K > Elon Musk has pledged shares of our common stock to secure certain bank borrowings. If Mr. Musk were forced to sell these shares pursuant to a margin call that he could not avoid or satisfy, such sales could cause our stock price to decline. > Certain banking institutions have made extensions of credit to Elon Musk, our Chief Executive Officer, a portion of which was used to purchase shares of common stock in certain of our public offerings and private placements at the same prices offered to third party participants in such offerings and placements. We are not a party to these loans, which are partially secured by pledges of a portion of the Tesla common stock currently owned by Mr. Musk. If the price of our common stock were to decline substantially and Mr. Musk were unable to avoid or satisfy a margin call with respect to his pledged shares, Mr. Musk may be forced by one or more of the banking institutions to sell shares of Tesla common stock in order to remain within the margin limitations imposed under the terms of his loans. Any such sales could cause the price of our common stock to decline further. The financial situation of his companies is very linked -- I personally think that was a big driver behind the purchase of Solar City since he had also used Tesla stock to back loans for that company as well.

gpm 9y ago

SpaceX is an entirely separate company from Tesla, and not public. Investing in Tesla is not investing in SpaceX and Tesla shareholders have no rights to anything SpaceX does (absent contracts between Tesla and SpaceX) and the reverse. SpaceX shareholders (e.g. Google, Musk) would presumably be quite strongly against merging with Tesla. There's nothing stopping SpaceX from directly competing with Tesla if they wanted to. On what basis do you imagine shareholders revolting? How would you imagine them doing so?

wonder_bread 9y ago
I understand the legalities of how they're separate, what I'm saying is if the "cross-fertilization" approach between the two companies proliferates to the point where they are material to each other's operations, what's to stop Starboard or some other activist investor group from launching a campaign against them? Obviously, Elon would be against this, I'm not saying they would personally be for this decision, I'm saying if the market stops being as forgiving to Tesla as it is, could a group not gain significant voting power and push this against them?
- deleted 9y ago
  [deleted]
thomaskcr 9y ago
> SpaceX is an entirely separate company from Tesla, and not public. Investing in Tesla is not investing in SpaceX That may be strictly true, but I think most people consider Elon's ownership and direction of Tesla a big part of what supports the stock's price. Enough of Musk's loans for SpaceX are backed by Tesla stock for that to get a mention in their 10K > Elon Musk has pledged shares of our common stock to secure certain bank borrowings. If Mr. Musk were forced to sell these shares pursuant to a margin call that he could not avoid or satisfy, such sales could cause our stock price to decline. > Certain banking institutions have made extensions of credit to Elon Musk, our Chief Executive Officer, a portion of which was used to purchase shares of common stock in certain of our public offerings and private placements at the same prices offered to third party participants in such offerings and placements. We are not a party to these loans, which are partially secured by pledges of a portion of the Tesla common stock currently owned by Mr. Musk. If the price of our common stock were to decline substantially and Mr. Musk were unable to avoid or satisfy a margin call with respect to his pledged shares, Mr. Musk may be forced by one or more of the banking institutions to sell shares of Tesla common stock in order to remain within the margin limitations imposed under the terms of his loans. Any such sales could cause the price of our common stock to decline further. The financial situation of his companies is very linked -- I personally think that was a big driver behind the purchase of Solar City since he had also used Tesla stock to back loans for that company as well.