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I really don’t get the obsessions with going private. It used to be everybody’s goal to go public, an IPO was one of the greatest achievements. Musks wants to g

by baxtr 8y ago

I really don’t get the obsessions with going private. It used to be everybody’s goal to go public, an IPO was one of the greatest achievements. Musks wants to go private to have better control of “his” companies and to prevent market pressures? I think being a public company is good for many reasons, amongst other: the public can participate in the success of companies and for the company it provides a great reality gauge. Maybe that’s what he’s afraid of...

Barrin92 8y ago
>I think being a public company is good for many reasons, amongst other: the public can participate in the success of companies and for the company it provides a great reality gauge. Maybe that’s what he’s afraid of... The return to some sort of 19th century capitalism dominated by private industry magnates has been going on for a while.
Voloskaya 8y ago
He stated multiple times that he doesn't like public market because investors don't care about long term goal. That's why he said he will never take SpaceX public (if he can), as his goal with SpaceX is to go to Mars, not to optimize for revenue. I believe he also said he only took Tesla public because he had no choice, not because it was his goal.
- xkjkls 8y ago
  There's hundreds of public companies focused on long term goals. Amazon, Berkshire Hathaway, Starbucks, etc. Why is Elon Musk special compared to these others?
  - petra 8y ago
    Or of curiosity, besides Amazon and Google and Toyota, are there any technology companies focused on long term growth?
    - xkjkls 8y ago
      Plenty: Spotify, Twilio, Salesforce, Box, Adobe, Workday, Atlassian, Intuit, ADP, to name a few.
  - jacques_chester 8y ago
    Apparently it's that analysts on the Tesla beat ask boring questions that are not cool.
  - fma 8y ago
    If you read what Elon Musk wrote...he does not believe Tesla will be private in the long term. He believes the stock price is a distraction, and invites people to crap on, or harm the company because they are shorting it. Public companies have pressure to perform every quarter, rather than focus on the long term goal. General Motors stopped reporting quarterly car sales (or monthly?) because it's a distraction. GM's focus, is actually electric vehicles and self driving cars. Per Musk's announcement, once Tesla is stable, and producing at a constant rate with predictable growth...like Amazon like Berkshire Hathaway, like Starbucks, then he will consider making Tesla public again. Interesting note...Tesla is worth more than GM.
    - xkjkls 8y ago
      > If you read what Elon Musk wrote...he does not believe Tesla will be private in the long term. He believes the stock price is a distraction, and invites people to crap on, or harm the company because they are shorting it. Cynically, I think it is hard to reconcile the Elon Musk who says "our stock price is a distraction" that we need to not consider it moving forward, and the Elon Musk who has borrowed against 40% of his stock in the company and whose pay package is entirely based in stock. This move prevents him personally from facing many possible downside risks, and it is hard to take his statements at face value. > Public companies have pressure to perform every quarter, rather than focus on the long term goal. General Motors stopped reporting quarterly car sales (or monthly?) because it's a distraction. GM's focus, is actually electric vehicles and self driving cars. General Motors stopped reporting monthly sales numbers in April, citing that monthly numbers are too volatile to gain meaningful insight from. That strikes me closer to a decision meant to provide greater transparency than one of Tesla's sort. > Per Musk's announcement, once Tesla is stable, and producing at a constant rate with predictable growth...like Amazon like Berkshire Hathaway, like Starbucks, then he will consider making Tesla public again. None of those are anywhere close to the predictable business you seem to think they are. Berkshire especially. Prior to 2017, Berkshire consistently posted extremely up and down earnings due to its huge positions in the re-insurance business. Since 2017, it has posted even more volatile earnings because its public stock positions were required to be marked to market instead of at book value. And you know what? Wall Street hasn't cared about the quarterly choppiness of the Omaha company. My point here is that Wall Street cares about quarterly financials... for some companies. If Elon had one that had proven himself capable of meeting his own goals or generating cash, he would be in that category. But instead he has a company with $10 billion in debt, only been cash flow positive for two quarters, and never come close to meeting its own stated estimates. It's kind of hard for his debt and equity holders to not start eventually asking "where's the beef?"
- nickik 8y ago
  He never said 'investors' didn't care about the long term goal, SpaceX has tons of investors and Tesla will continue to hold them.
  - Voloskaya 8y ago
    "[...]public market because investors[...]" meant "[...]public market because public investors[...]" obviously.
tachyonbeam 8y ago
I'm pissed. I've been invested in Tesla for over two years. I was hoping to hold for the long term and maybe retire early. It seems to me that taking Tesla private is just another investment opportunity being taken away from the masses. Think about SpaceX, think about all the startups that Google and Facebook buy up that are never publicly traded. There are many investment opportunities out there, probably most of the best opportunities, that are only accessible to an elite club of billionaires. Musk claims people will still be able to invest in Tesla and hold shares, but I'm heavily skeptical. I'm Canadian, and many US financial companies do not deal with foreigners. There is also no way for me, currently, to invest in SpaceX. That opportunity is reserved to the ultra rich. As a Tesla investor, this is a real blow. As someone who grew up poor and only became "middle class" after years of hard work, I feel like I've been spit in the face.
- hughes 8y ago
  What's preventing you from continuing to hold?
  - marvin 8y ago
    If this goes through, Tesla will no longer be listed on the stock exchange, and all those shares will be force-bought at the sale price. There is talk of creating an investment vehicle that allows existing shareholders to retain their ownership after the company has gone private, but there isn't any information yet on how this would affect foreign investors.
    - nickik 8y ago
      Elon already said this was not the case. You will be able to continue to hold. Stop spreading a panic when you have no evidence that your story is true.
      - marvin 8y ago
        Can you give a link that corroborates this? Because this was distinctly not my impression after reading Tesla’s press release.
Reedx 8y ago
I don't get the obsession with going public. It has killed or derailed many a great company. It's not exactly a good thing to constantly be chasing short term profits and quarterly results over long term health. The idea that companies should have the goal of going public is deeply flawed/unhealthy, I think. Though it makes sense for some.
- rocky1138 8y ago
  Maxis and EA come to mind :(
- baxtr 8y ago
  You mean companies like Apple?
- refurb 8y ago
  It's not exactly a good thing to constantly be chasing short term profits and quarterly results over long term health. That's entirely the company's decision. If they want to focus on long-term growth at the expense of profit (i.e. Amazon), they can.
- nickik 8y ago
  You do understand that going public does not automatically equal only valuing short term profits right?
  - hndamien 8y ago
    Amazon managed to not chase them for some time while being public.
  - Reedx 8y ago
    Of course, there are always exceptions. Amazon is an outlier.
sonaltr 8y ago
What's not to get? The owner gets more control - both on the company, it's long term vision, it's investors and the future of the company. It's a win for all. What advantage does being public get you? It gets you $ at a massive cost - both regulatory and quarterly.
- dahdum 8y ago
  It also gets you regulatory protection, to an extent. Apple is owned by countless pension funds, endowments, likely every politician who invests, and a large % of the general population. Their success is also part success for all those people. Private companies have far fewer defenders, much easier to vilify and punish.
  - sonaltr 8y ago
    That's true of Apple - how about SNAP or SHOP? or a ton of other smaller software companies that most have not even heard of apart from the ones in the know?

by baxtr 8y ago

Barrin92 8y ago

>I think being a public company is good for many reasons, amongst other: the public can participate in the success of companies and for the company it provides a great reality gauge. Maybe that’s what he’s afraid of... The return to some sort of 19th century capitalism dominated by private industry magnates has been going on for a while.

Voloskaya 8y ago

He stated multiple times that he doesn't like public market because investors don't care about long term goal. That's why he said he will never take SpaceX public (if he can), as his goal with SpaceX is to go to Mars, not to optimize for revenue. I believe he also said he only took Tesla public because he had no choice, not because it was his goal.

xkjkls 8y ago
There's hundreds of public companies focused on long term goals. Amazon, Berkshire Hathaway, Starbucks, etc. Why is Elon Musk special compared to these others?
- petra 8y ago
  Or of curiosity, besides Amazon and Google and Toyota, are there any technology companies focused on long term growth?
  - xkjkls 8y ago
    Plenty: Spotify, Twilio, Salesforce, Box, Adobe, Workday, Atlassian, Intuit, ADP, to name a few.
- jacques_chester 8y ago
  Apparently it's that analysts on the Tesla beat ask boring questions that are not cool.
- fma 8y ago
  If you read what Elon Musk wrote...he does not believe Tesla will be private in the long term. He believes the stock price is a distraction, and invites people to crap on, or harm the company because they are shorting it. Public companies have pressure to perform every quarter, rather than focus on the long term goal. General Motors stopped reporting quarterly car sales (or monthly?) because it's a distraction. GM's focus, is actually electric vehicles and self driving cars. Per Musk's announcement, once Tesla is stable, and producing at a constant rate with predictable growth...like Amazon like Berkshire Hathaway, like Starbucks, then he will consider making Tesla public again. Interesting note...Tesla is worth more than GM.
  - xkjkls 8y ago
    > If you read what Elon Musk wrote...he does not believe Tesla will be private in the long term. He believes the stock price is a distraction, and invites people to crap on, or harm the company because they are shorting it. Cynically, I think it is hard to reconcile the Elon Musk who says "our stock price is a distraction" that we need to not consider it moving forward, and the Elon Musk who has borrowed against 40% of his stock in the company and whose pay package is entirely based in stock. This move prevents him personally from facing many possible downside risks, and it is hard to take his statements at face value. > Public companies have pressure to perform every quarter, rather than focus on the long term goal. General Motors stopped reporting quarterly car sales (or monthly?) because it's a distraction. GM's focus, is actually electric vehicles and self driving cars. General Motors stopped reporting monthly sales numbers in April, citing that monthly numbers are too volatile to gain meaningful insight from. That strikes me closer to a decision meant to provide greater transparency than one of Tesla's sort. > Per Musk's announcement, once Tesla is stable, and producing at a constant rate with predictable growth...like Amazon like Berkshire Hathaway, like Starbucks, then he will consider making Tesla public again. None of those are anywhere close to the predictable business you seem to think they are. Berkshire especially. Prior to 2017, Berkshire consistently posted extremely up and down earnings due to its huge positions in the re-insurance business. Since 2017, it has posted even more volatile earnings because its public stock positions were required to be marked to market instead of at book value. And you know what? Wall Street hasn't cared about the quarterly choppiness of the Omaha company. My point here is that Wall Street cares about quarterly financials... for some companies. If Elon had one that had proven himself capable of meeting his own goals or generating cash, he would be in that category. But instead he has a company with $10 billion in debt, only been cash flow positive for two quarters, and never come close to meeting its own stated estimates. It's kind of hard for his debt and equity holders to not start eventually asking "where's the beef?"
nickik 8y ago
He never said 'investors' didn't care about the long term goal, SpaceX has tons of investors and Tesla will continue to hold them.
- Voloskaya 8y ago
  "[...]public market because investors[...]" meant "[...]public market because public investors[...]" obviously.

tachyonbeam 8y ago

I'm pissed. I've been invested in Tesla for over two years. I was hoping to hold for the long term and maybe retire early. It seems to me that taking Tesla private is just another investment opportunity being taken away from the masses. Think about SpaceX, think about all the startups that Google and Facebook buy up that are never publicly traded. There are many investment opportunities out there, probably most of the best opportunities, that are only accessible to an elite club of billionaires. Musk claims people will still be able to invest in Tesla and hold shares, but I'm heavily skeptical. I'm Canadian, and many US financial companies do not deal with foreigners. There is also no way for me, currently, to invest in SpaceX. That opportunity is reserved to the ultra rich. As a Tesla investor, this is a real blow. As someone who grew up poor and only became "middle class" after years of hard work, I feel like I've been spit in the face.

hughes 8y ago
What's preventing you from continuing to hold?
- marvin 8y ago
  If this goes through, Tesla will no longer be listed on the stock exchange, and all those shares will be force-bought at the sale price. There is talk of creating an investment vehicle that allows existing shareholders to retain their ownership after the company has gone private, but there isn't any information yet on how this would affect foreign investors.
  - nickik 8y ago
    Elon already said this was not the case. You will be able to continue to hold. Stop spreading a panic when you have no evidence that your story is true.
    - marvin 8y ago
      Can you give a link that corroborates this? Because this was distinctly not my impression after reading Tesla’s press release.

Reedx 8y ago

I don't get the obsession with going public. It has killed or derailed many a great company. It's not exactly a good thing to constantly be chasing short term profits and quarterly results over long term health. The idea that companies should have the goal of going public is deeply flawed/unhealthy, I think. Though it makes sense for some.

rocky1138 8y ago
Maxis and EA come to mind :(
baxtr 8y ago
You mean companies like Apple?
refurb 8y ago
It's not exactly a good thing to constantly be chasing short term profits and quarterly results over long term health. That's entirely the company's decision. If they want to focus on long-term growth at the expense of profit (i.e. Amazon), they can.
nickik 8y ago
You do understand that going public does not automatically equal only valuing short term profits right?
- hndamien 8y ago
  Amazon managed to not chase them for some time while being public.
- Reedx 8y ago
  Of course, there are always exceptions. Amazon is an outlier.

sonaltr 8y ago

What's not to get? The owner gets more control - both on the company, it's long term vision, it's investors and the future of the company. It's a win for all. What advantage does being public get you? It gets you $ at a massive cost - both regulatory and quarterly.

dahdum 8y ago
It also gets you regulatory protection, to an extent. Apple is owned by countless pension funds, endowments, likely every politician who invests, and a large % of the general population. Their success is also part success for all those people. Private companies have far fewer defenders, much easier to vilify and punish.
- sonaltr 8y ago
  That's true of Apple - how about SNAP or SHOP? or a ton of other smaller software companies that most have not even heard of apart from the ones in the know?