These have been some real banner days for Elon Musk. He burned down most of his $44 billion investment in Twitter. He drove remaining advertisers away with his antisemitism. Then he went into a snit on stage and told those advertisers to go fuck themselves. Now he’s frosting that cake with a daily dose of horrifying racism and taking some time to sneer at disabled people.
Oh, and he finally got out the CyberTruck. Four years late. With half the promised range. Far above the promised price. And a problem with snow.
All of which makes it an excellent time for Musk to inform the Tesla board that unless they give him another $80 billion in shares, he’ll take his big brain elsewhere.
As The New York Times reports, Musk’s threat was delivered the way all his business deals are made these days: with a series of sloppy posts on social media. In a Monday post to X, Musk told the board at Tesla that he needs to own 25% of the company so that he can have enough control of their developments in AI and robotics. Otherwise, Musk says he will “build products outside of Tesla.”
To be clear, Musk once held a lot more Tesla stock, but he’s been selling it off over the past few years, including some instances where he seemed to benefit from insider information, to drop billions into his bank account. Now he wants the company to give him about 12% of the remaining stock. Just because.
The threat here seems to be that Musk will shift his attention to one of the other companies where he is inconceivably allowed to be CEO at the same time he is running Tesla. This probably means the X.AI startup he conveniently created just last year and that he claims will “understand the true nature of the universe.” Exactly how X.AI would get all the new stuff and Tesla would be stuck, unable to use its supercomputer and robotics lab, is unclear.
Also, Musk’s track record on this topic is not exactly stellar.
What’s going on here may have little connection to anything Musk has mentioned in his posts. Or even to AI. Musk could be making this extortion threat because the richest man in the world is in danger of losing a huge chunk of his wealth.
There’s a case in Delaware's Court of Chancery that’s looking into the huge package of stock, stock options, and pay that helped make Musk so wealthy in the first place. That case is looking at how Musk used his position as the largest shareholder and CEO to dominate the Tesla board and award himself a $55 billion compensation package in 2018.
Though the video ends with Musk trying to get the case dismissed, that didn’t happen. Instead, the judge has questioned whether Tesla sent misleading information to shareholders. That includes the fact that the Musk compensation plan wasn’t thought up by the board of directors, it was “dictated” to them by Musk. The board may have also hidden connections between Musk and board members. (One of the board members is Musk’s brother—that one was probably obvious.)
In a five-day trial, Musk testified that he needed that pay package because, “It's a way to get humanity to Mars. So Tesla can assist in potentially achieving that." No matter what anyone thinks of Musk’s space ambitions, that’s not an argument that’s likely to be all that persuasive in convincing a chancery judge. It also might not be that pleasing to Tesla shareholders who are more concerned about the company that Musk apparently sees as just a means to an end.
Musk could lose this case.
Should the judge strike down Musk’s compensation package, Musk could see another big hit to his bottom line. $44 billion here. $55 billion there. Eventually, it adds up to real money.
The 12% of stock that Musk is asking for to keep him down on the Tesla farm also happens to be what was in that compensation package. So Musk may be setting up a situation where the board has a reason to give him back what he’s lost, assuming he loses it. If that happens, Musk could sell the supposed intellectual property of X.AI to Tesla, with the board handing him all that stock in exchange.
Such a move would almost certainly result in more lawsuits. But hey, Musk would have the money in his pocket again. And that would allow him to go back to whatever else he wants to do while that case grinds through the courts.
And he does have things to do. The biggest thought on Elon Musk’s mind these days doesn’t seem to be space or EVs. Instead, it’s his hatred for diversity programs. Musk called attempts to see that 50% of those in pilot training are either women or people of color “insane.” He slammed the FAA for disability hiring goals, claimed that airlines and agencies are putting DEI above passenger safety, and declared that the problem with Boeing is that it doesn’t hire enough white men. That’s in addition to heavy-duty racism like agreeing that students from historically Black colleges and universities have lower IQs and shouldn't be allowed to become pilots.
“People will die over DEI,” tweeted Musk. He probably thought that was genius.
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