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So much of the value of the company is tied to Elon Musk's vision. If you think he's going to fail in bringing about that vision, then you should think the corr

by arijun 8y ago

So much of the value of the company is tied to Elon Musk's vision. If you think he's going to fail in bringing about that vision, then you should think the correct value of the company is much lower. In which case, you shouldn't have enough of a stake to vote Elon out.

macintux 8y ago
There are many good reasons to think that regardless of the person(s) involved, the chairman of the board should have oversight responsibilities over the CEO.
- pavlov 8y ago
  Yes, in a public company it’s just basic good governance that the CEO and chairman should be separate people, not just separate hats for one unquestioned leader. Case in point: Nokia was enormously successful in the ‘90s with Jorma Ollila as CEO. In 1999 he was also named Chairman of the Board. That is essentially when Nokia started its downward slide of coasting on past successes.
  - bald 8y ago
    > Case in point: Nokia was enormously successful in the ‘90s with Jorma Ollila as CEO. In 1999 he was also named Chairman of the Board. That is essentially when Nokia started its downward slide of coasting on past successes. sample size 1 Correlation != causality
    - pavlov 8y ago
      Thanks for your service, Pointless Statistics Bot. Nokia is an example of a corporation where concentrating power at the highest level led to the undesirable outcome of suppressing criticism and innovation. Ollila has basically admitted as much.
      - zxcmx 8y ago
        I think part of the difference in perspective is that many people would say that it didn’t matter who the CEO was; Nokia didn’t have the DNA to do smartphones. In the same way that Motorola didn’t. I think any possible governance issues are really overshadowed by the intrinsic difficulty of dealing with paradigm shift. Expertise in radio, hardware, baseband and all sorts of other great stuff didn’t translate well into phones getting bigger than computers used to be and managing the software complexity that came along with it. They did the old school engineering super well but it wasn’t enough. Yes there’s enormous history there and they did a bunch of things that presaged the modern smartphone but it needed a different kind of company and a different engineering culture to build the things that took over the market. Maybe they could have done it with a visionary type CEO but it would take an extraordinary person to have turned that ship around. In retrospect the iceberg and the flaws in the ship are obvious but Nokia was a very successful company and those are the hardest to change. In any case this is why I would argue that comparing Nokia with Tesla is wrong; Tesla has its flaws but it seems likely that it’s on the right side of the paradigm shift.
    - braythwayt 8y ago
      The expression "case in point," like the expression "exempli gratia," explicitly offers that a certain thing is an example of a phenomenon, not justification for it. Therefore, while it is extremely interesting to ask if concentrating power is a cause or consequence of institutional rot, I don't think we can complain about a sample size of 1 if the argument doesn't say that this one case proves the effect. But yes, it is extremely interesting to ask whether removal of oversight causes rot, or if it is a consequence of rot. In other words, if we randomly appoint certain successful CEOs to chair their own boards, will their companies do worse than a control group that retain separate governance? Hard to conduct that experiment, but it would be interesting. Thanks for the suggestion.
prebuild_l 8y ago
There are two things I would like to understand about the 'correct value of the company', both of them related to battery technology: 1. I previously thought that Tesla/SolarCity built their own technologically advanced batteries which would give Tesla cars a competitive advantage. It turns out Tesla run on (something similar to) generic 'laptop batteries'. Do Tesla have some special, secret knowledge about how to build car-sized battery packs from these, or is it a solvable engineering problem for someone else to emulate this? 2. Is there a lot of risk to the battery technology? Is it possible/likely for Tesla to suffer a series of battery fires the way Samsung did? Ultimately, I am trying to understand the residual value of the company if they fail at making and selling cars. If the short thesis is correct, their car doesn't set the world alight, and they run out of money, is there something valuable related to building batteries that other electric car builders will definitely want to salvage from the company? Or is their battery technology something that a group of smart people at BMW or Chrysler could easily replicate?

by arijun 8y ago

macintux 8y ago

There are many good reasons to think that regardless of the person(s) involved, the chairman of the board should have oversight responsibilities over the CEO.

pavlov 8y ago
Yes, in a public company it’s just basic good governance that the CEO and chairman should be separate people, not just separate hats for one unquestioned leader. Case in point: Nokia was enormously successful in the ‘90s with Jorma Ollila as CEO. In 1999 he was also named Chairman of the Board. That is essentially when Nokia started its downward slide of coasting on past successes.
- bald 8y ago
  > Case in point: Nokia was enormously successful in the ‘90s with Jorma Ollila as CEO. In 1999 he was also named Chairman of the Board. That is essentially when Nokia started its downward slide of coasting on past successes. sample size 1 Correlation != causality
  - pavlov 8y ago
    Thanks for your service, Pointless Statistics Bot. Nokia is an example of a corporation where concentrating power at the highest level led to the undesirable outcome of suppressing criticism and innovation. Ollila has basically admitted as much.
    - zxcmx 8y ago
      I think part of the difference in perspective is that many people would say that it didn’t matter who the CEO was; Nokia didn’t have the DNA to do smartphones. In the same way that Motorola didn’t. I think any possible governance issues are really overshadowed by the intrinsic difficulty of dealing with paradigm shift. Expertise in radio, hardware, baseband and all sorts of other great stuff didn’t translate well into phones getting bigger than computers used to be and managing the software complexity that came along with it. They did the old school engineering super well but it wasn’t enough. Yes there’s enormous history there and they did a bunch of things that presaged the modern smartphone but it needed a different kind of company and a different engineering culture to build the things that took over the market. Maybe they could have done it with a visionary type CEO but it would take an extraordinary person to have turned that ship around. In retrospect the iceberg and the flaws in the ship are obvious but Nokia was a very successful company and those are the hardest to change. In any case this is why I would argue that comparing Nokia with Tesla is wrong; Tesla has its flaws but it seems likely that it’s on the right side of the paradigm shift.
  - braythwayt 8y ago
    The expression "case in point," like the expression "exempli gratia," explicitly offers that a certain thing is an example of a phenomenon, not justification for it. Therefore, while it is extremely interesting to ask if concentrating power is a cause or consequence of institutional rot, I don't think we can complain about a sample size of 1 if the argument doesn't say that this one case proves the effect. But yes, it is extremely interesting to ask whether removal of oversight causes rot, or if it is a consequence of rot. In other words, if we randomly appoint certain successful CEOs to chair their own boards, will their companies do worse than a control group that retain separate governance? Hard to conduct that experiment, but it would be interesting. Thanks for the suggestion.

prebuild_l 8y ago

There are two things I would like to understand about the 'correct value of the company', both of them related to battery technology: 1. I previously thought that Tesla/SolarCity built their own technologically advanced batteries which would give Tesla cars a competitive advantage. It turns out Tesla run on (something similar to) generic 'laptop batteries'. Do Tesla have some special, secret knowledge about how to build car-sized battery packs from these, or is it a solvable engineering problem for someone else to emulate this? 2. Is there a lot of risk to the battery technology? Is it possible/likely for Tesla to suffer a series of battery fires the way Samsung did? Ultimately, I am trying to understand the residual value of the company if they fail at making and selling cars. If the short thesis is correct, their car doesn't set the world alight, and they run out of money, is there something valuable related to building batteries that other electric car builders will definitely want to salvage from the company? Or is their battery technology something that a group of smart people at BMW or Chrysler could easily replicate?