Elon Musk remains cavalier after SEC settlement, worrying investors again

Elon Musk settled with the SEC after the latter sued him and Tesla for misleading investors with his tweet on August 7, 2018: “Am considering taking Tesla private at $420. Funding secured.— Elon Musk (@elonmusk)”

As part of the settlement, Musk must step down as Tesla’s chairman for three years and pay $20 million in fines. Tesla must also pay an additional $20 million in fines and appoint two independent directors in addition to an independent chairman. If you asked Musk though, perhaps nothing has really changed. He was back to his usual antics, calling the SEC the “Shortseller Enrichment Commission” via Twitter on Friday.

A Quixotic crusade

Elon Musk’s crusade against short sellers has a long and storied history that reached an apex in August, when he considered taking Tesla public with help from a Saudi fund. The SEC initially offered Musk a better deal, asking him to step down as chairman for only two years and pay $10 million in fines. However, Musk urged Tesla to fight against the settlement, threatening to resign if Tesla settled. However, when the SEC sued the company on September 27, the board turned Musk’s mind around.

One of the main reasons that Musk didn’t want to settle was because he wanted to publicly state his innocence of the charges pursued by the SEC. With the settlement, Musk doesn’t have to admit guilt, but he can’t proclaim his innocence, either.

Elon Musk remains cavalier after SEC settlement, worrying investors again
Tesla’s factory

Legal experts opined that the fines levied against Musk are higher than any other CEOs have paid. However, other CEOs would also have been asked to step down in such a situation. The SEC may have thought that removing Musk would be bad for shareholders.

The settlement has relieved Tesla advocates. “This is a company people are actively investing in, both in the stock market but also in their own garage,” said Rebecca Lindland, an executive analyst at Kelley Blue Book. “So, it would have been damaging to a lot of people if the company had gone bankrupt or if this had gone on for years.”

Lindland was also positive about Tesla’s impending appointment of new directors. “It will provide some independent governance that Tesla is lacking right now as it grows and as it continues to develop as a company.”

Does Elon Musk love getting into trouble?

Musk courts trouble, criticizing analysts and the media as well as calling rescue divers pedophiles on Twitter. One former Tesla investor, who wished to remain unnamed, speculated that Musk enjoys being the center of attention. Similar to Donald Trump, Musk is someone who loves attention. Musk smoked marijuana on Joe Rogan to create a buzz. All publicity is good publicity, and the only thing he’s scared of the most is when you’re not talking about him.”

Elon Musk remains cavalier after SEC settlement, worrying investors again

Whatever the case, Musk’s “funding secured” tweet garnered him some costly publicity. According to one estimate, the tweet cost him approximately $327,868 per character.

Musk’s latest tweet also led to a 7% decrease in Tesla’s shares. “I don’t have much, but I believe in you and your vision,” tweeted Drew G, “Unfortunately, I invest what little I have into Tesla and continuously lose months of savings due to your tweets. Please think of us small people.”

It should be noted that, at the moment, the settlement agreement is yet to be approved by the courts. If Musk isn’t careful, something worse may be waiting for him in the wings.

Does Tesla and Elon Musk need an intervention?

As awesome as Tony Stark is, sometimes he needs friends to help him get through the day. That can include fighting aliens and rogue AIs or helping him recover from alcoholism and get his company back to speed. Perhaps, it’s time for Elon Musk to get the same kind of help, too.

Tesla’s shares slid by more than six percent on Friday, after Musk smoked weed during a live interview with Joe Rogan. This is the kind of behavior that, while not entirely unexpected from a man who launched a car into space, is also rarely seen from CEOs who run companies worth 45 billion dollars.

A Series of Unfortunate Events

2018 hasn’t been easy, for both Musk and Tesla. It has consistently missed production targets for the Model 3. Musk has amped up production since last year, a process that he has termed “production hell”. In a radical move, he attempted to automate most of the production line. One such production robot, affectionately dubbed the “fluffer bot”, was so ineffective that it repeatedly stalled production. He eventually had to replace it by human workers.

Then came the Thailand rescue saga, where Musk accused a diver of being a pedophile. He doubled down on these accusations in August, wondering why the diver, Vernon Unsworth, didn’t feel confident enough to sue Musk. Unsworth happily obliged.

Last month also saw Musk teasing about taking Tesla private. NYSE shorts Tesla among one of the most commonly shorted stocks. And Musk has often accused Tesla short sellers of actively trying to sabotage Tesla. However, he changed his mind after apparently securing funding from a Saudi Arabian fund. The SEC is also investigating Tesla for Musk’s initial “funding secured” tweet.

Should Musk Head Towards Greener Pastures?

elon musk tesla

Musk admitted, in a tearful interview for the New York Times, that 2018 has been the most stressful year of his life so far. He constantly uses Ambien and is open to hiring another executive at Tesla to help him tide over the constant challenges. Earlier, Azalea Banks also alleged on Instagram that she was in Musk’s house while he tweeted about taking Tesla private when he was on acid.

Musk’s latest stunt triggered two exits. His chief accounting officer, Dave Morton, is leaving Tesla after just a month on the job. Apparently, his expectations about the pressure and environment have been thoroughly exceeded, especially given the level of public attention being placed on the company. He and HR chief Gaby Toledano join a list of thirty executives who have departed Tesla since 2016.

Musk reshuffled his executive deck by announcing a series of promotions through a company-wide email. It should be noted that these were not new hires, and thus long planned before the resignations on Friday.

Musk’s antics put the investors in a tough spot. Tesla’s stocks are down by fifteen percent so far; compared to the all-time high last year, it’s a further degradation of thirty percent. There’s much to rejoice for within Tesla, with the SolarCity acquisition and plans for semi-trucks targeted towards corporate buyers. In fact, Tesla is forecasted to turn a profit for this year’s fourth quarter and expected to hold speed for the entirety of FY 2019-20.

However, now investors can’t help but wonder if Musk doesn’t just need another hand as a COO, but if he should step down as CEO entirely. Possible alternatives for Musk include ex-Ford CEO, Alan Mullaly.

SpaceX, for instance, is faring much better than Tesla, where Musk has a well-regarded CEO in Glynne Shotwell. Shotwell has been at the company since 2002 and was made COO in 2008.

Are Musk and Tesla Inseparable?

elon musk tesla

In Tesla, Musk’s influence is much more singular than in SpaceX. He constantly spends time with engineering problems. During a routine factory tour, Musk was visibly annoyed when the assembly line stopped moving. Although it was a standard safety precaution, he stated that wished the cars to keep moving anyways and didn’t see how the process could hurt him, head-butting a car to demonstrate his confidence.

It is, indeed, true that people are out to get Tesla. Andrew Left, an activist short seller, is suing Tesla and Chairman Elon Musk for actively inflating the company’s stock price. “In response to Musk’s tweets,” Left said in his official complaint, “many Tesla short-sellers were forced to cover their positions at artificially high prices, losing approximately $1.3 billion in a single day.”

It’s tempting to compare Musk to both Steve Jobs and Howard Hughes when it comes to brilliance, charisma and a bluster that may signal his eventual downfall. “People are always telling him he can’t do it,” explained Christopher Davenport, the author of Space Barons: Elon Musk, Jeff Bezos, and the Quest to Colonize the Cosmos. “But he doesn’t like to hear it can’t be done. He categorically rejects that. It’s all about, ‘How can we do it?’”

“Starting a space company from scratch is simply not done. People warned him against it time and time again, and Elon’s friends even staged an intervention. But he had a commitment to his ideas and a passion and a vision and belief that he saw an opening there — a real business opportunity where, from a technology standpoint, there hadn’t been a lot of advancement.”

“The reason Elon seems to attract drama is that he is so transparent, so open, in a way that can come back to bite him,” said Kimbal Musk, Mr. Musk’s younger brother, to New York Times. “He doesn’t know how to do it differently. It’s just who he is.”

Why Musk Prefers Sleeping on Floors over Cursed Vacations

Elon Musk tesla

The problem with Musk, perhaps, is that he is too confident and firm in his belief in himself. He leads from the front, like the engineering version of Alexander the Great. Often found sleeping on factory floors or under his office desk. “A C.E.O.’s most important job is to build a great team around you,” said Bill George, a Goldman Sachs board member. “He shouldn’t be sleeping on the factory floor. I’d rather have him sleeping at home.”

Musk’s legendary work schedule is well known. He works one hundred and twenty hours a week, dividing his time between SpaceX and Tesla. He nearly missed his brother’s wedding in Spain this summer. “I got there two hours before the ceremony,” he said. “I left directly from the factory. And then I went straight back.”

As committed as Musk is, he is only human. We need humans like Musk, now more than ever. In a world where the youngest billionaires run the gamut from Mark Zuckerberg to Kylie Jenner, Musk is working on genuine problems to create solutions that benefit society, and civilization, at large.

“Launching a business is hard, particularly when you have a vision to change the world like Tesla,” wrote Amy Nelson, founder, and CEO of The Riveter, which creates work and community spaces. “I applaud Musk for his authenticity and I believe it is important for founders to share with one another and the world what starting a company is like…Musk, I hear you. This is really wonderful and really hard. You’ve got a few more years of running a company under your belt, but trust me: I feel your pain.”

Musk hasn’t taken a vacation since 2001. Vacations are cursed, he thinks. You can’t blame him. In 2000, he was ousted from Paypal by the board and replaced by Peter Thiel. Later, he contracted malaria in Brazil and almost died. However, for his own sake, and for ours as well, perhaps Musk should try taking more time off than he usually does.
The truth is, we can all try staging an intervention to bring Musk down to Earth. But interventions haven’t worked for Musk in the past, and they probably won’t work now, either.

Ground stations receive BS-1 signal

According to the state minister for ICT, Junaid Ahmed Palak, the ground stations situated in Gazipur and Betbunia have received test signals from Bangladesh’ first ever satellite, the Bangabandhu Satellite -1. The signal was received at 4.25 AM local time, on the 12th of May.

The payload attached to the Falcon 9 was detached to its geostationary orbit 33 minutes after launching from the Kennedy Space Center in Florida. Within 3 minutes of that the satellite had been successfully deployed, Palak noted. It has been reported that the European built satellite will settle into its orbital slot after 11 days.

The first 36 minutes of the launch of the Falcon 9, the vehicle that took the BS-1 to space, was observed by a contingent of Bangladeshis. Lead by the Prime Minister’s ICT adviser Sajeeb Wazed Joy, the Bangladeshis watched on from the KSC visitor’s area. Besides Wazed and Palak, the contingent was led by the state minister for information, Taran Halim. They were accompanied by junior officers, family members and a number of non-resident Bangladeshis who live around Florida and the rest of North America. Everyone came together on the day to mark a proud achievement for the nation.

The satellite is expected to be operated by its makers, Thales Alenia Space, for the first year of its operation. During this time, Bangladeshis will be trained to take control of the satellite. They will take full control of the satellite by the third year of operation. The satellite is expected to have a lifespan of 15 years, during which time Bangladesh will share the satellite with a multitude of different SAARC countries to cover for its initial costs.

The Bangabandhu-1 is a first of its kind. Bangladesh has had satellites up before, but not one that was uniquely its own. Until now the country has had to share satellite bandwidth by renting it from various other countries. It will no longer be the case as the satellite becomes operational for commercial use by next week. Bangladesh is currently paying 14 million USD per year renting foreign satellites for VSAT and DTH services. Now, with the Bangabandhu-1 Bangladeshi’s can have uninterrupted television broadcast and smooth, cheap international communication. Not to mention that this will also be a great source of revenue for the government as 50 transponders are already planned to be rented out to Nepal, Bhutan, Philippines. Indonesia and other countries for 50 million USD. The BS-1 will also provide many areas of the country with internet and VoIP where it was previously very difficult to do so.

The Bangabandhu-1 is a national achievement that all Bangladeshis are, and should, be proud of. Yet it is only the first step. Thecountry has only now reached space for the first time, more than half a century after the USA and Russia. Bangladesh’s entry into the space race may be late but no one said they can’t put a man on the moon in the near future.

LeEco and its failed attempts at world domination

Let’s all pause for a second and think about China. From the 1990s to present day, China has taken the international market by storm. Providing products for all levels of consumers, it seems like nothing will stop this country from taking over the world.

Regardless of the misplaced hate for Chinese products, one can only watch when a massive company tries to penetrate an international market and fails. And the perfect example for this is LeEco.

Everybody knows about Xiaomi, the household Chinese brand. LeEco, formerly LeTV was established six years before Xiaomi, way back in 2004. Although the popularity of Netflix is rising, LeTV was one of the first players in the video streaming market. The owner, Jia Yueting, earned big bucks from this untapped market within China. Buying off Coolpad Group 2015, he implemented technologies from his newly bought company and merged it with his own brand, LeTV. Hence, on 2016, he released the Le 1S & the Le Max.

It was a hit. Not as big of a hit as the OnePlus or the competing Xiaomi mobile phones, but these global hits came right right from the bowels of Shenzhen, where LeTV phones came from;

First mistake: Overestimation of time

Regardless of what the phone offered in build quality and performance, they failed to utilize the time period in which phones featuring Snapdragon processors lacked proper heat dissipation technologies, namely the infamous Snapdragon 810 phones. In this period, Xiaomi rose to the top with their signature flagship phones and they directly skipped implementing this processor in their phones, opting to use the hexacore Snapdragon 808 in their then-flagship phone, the Mi 4S.

LeTV, being a completely new player, took this market by storm but took way too long to do it. Featuring a wonky timeline with no vision, they released affordable flagships at low prices, but with the processor of Mediatek, known for GPS issues and low performance.

Second mistake: aggressive expansion, unknown brand name

For any entrepreneur, starting out in a market is quite easy. You try to sell your product and it slowly builds momentum. But in a saturated market, expansion is quite hard. Just a year after releasing its first phone, LeEco directly expanded into the US market. The US market already had cheap phones pouring in from the likes of Blu and had seen a massive import of Xiaomi phones.

But nobody knew of LeEco.

Up until 2016, LeEco was known as LeTV. LeTV was marketed under a single brand name for its media streaming services and electronics. Their reputed connections with Chinese consumers went a long way and skyrocketed their businesses. But an abrupt decision to change their name tried to push forward a design nobody was ready to acknowledge yet.

Among all these decisions taken within a year, they announced their plans to acquire Vizio in a two billion dollar deal in July 2016. Vizio was to be operated as an independent subsidiary in California, while Vizio’s Inscape was going to be spun out as a privately held company. The deal was later cancelled and LeEco’s reputation in the market was tarnished.

Third mistake: steady cash injection into failed projects

On October 2016, LeEco had a big event in which it announced its plans to expand into the USA. The event was ambitious to say the least, announcing smartphones, 4K TVs, Set Top Boxes, VR Goggles, smart goggles, and a freaking self-driving concept car from another startup company from the owner of LeEco.

Where was the money coming from? The streaming services, of course. But how much can one afford?

A few days later, the company’s CEO sent out an internal memo saying how the company overextended in its global strategy but the company’s capital and resources were limited. Good job Captain Obvious. You bought land from Yahoo in Silicon Valley for 250 million dollars while being strapped on a mountain of debt to suppliers and business partners.

Following of a flurry of mistakes and terrible decisions, LeEco announced that its offices will be home to 12,000 employees in an “EcoPark”. Today, the office is a ghost town with less than 500 people working in the office regularly, as result of serious layoffs and wonky relationships with investors.

Back in China, the CEO tried to secure investments for a while, but were avoided by big investors in the country. A few days ago, the CEO was blacklisted as a debtor in China’s debtor database, being recalled to China for paying debts of a hundred million dollars.

Fourth mistake: management issues

Whereas companies like Xiaomi started out with a strong management and a CEO with proper experience of handling startups properly, LeEco’s initial management started out quite wonky. While Xiaomi’s initial investors consisted of Google’s employees and some from Snapdragon LeEco only managed to poach Google’s lead legal counsel, who stayed on for less than a year.

Overambitious planning without any streamlined operations made LeEco’s resources go down the drain.

On the other hand, Jia Yueting’s very own pet project to take on Tesla – Faraday Future –  saw its California based factory deserted, with no development occurring whatsoever.

Aftermath : making amends

Remember when we mentioned LeEco buying off Coolpad Group in 2015?

A few days ago, LeEco liquidated half of its share on Coolpad. Right after  Coolpad’s liquidation comes 2.2 billion dollars of cash injection into LeEco from Sunac China Holdings. The investment will see 160 million dollars in LeEco’s cinema division, 918 million dollars in LeEco’s ICT sector and 1.2 billion dollars in LeEco’s smart internet TV division.

And the results are already in. A few days ago, LeEco released ten new smart TV models in China. It seems that Jin Yueling finally has a proper vision of expansion through which they can find sustainable development in the markets it has already expanded into.

The future still looks bleak for Jin Yueling as Faraday Future’s California factory is deserted and all outlooks for its ambitious electric vehicle seems scrapped, but we can surely hope that LeEco can regain its former glory and spice up the niche market of Chinese electronics in the future.

The future of electric vehicles

Five years ago, people couldn’t care less about electric vehicles. Why would they? They were unreliable, expensive and slow. Electric vehicles back then were considered a relic of the past. These vehicles running on alternate sources of energy have tried to make a return throughout the course of time, but this time, it might actually be here to stay.

What started the wildfire?

Thanks to a company called Tesla, Inc. electric vehicles are here to scramble the automobile industry. Tesla’s first vehicle, the Roadster couldn’t create a lot of buzz. But things changed in 2012, when Tesla released the Model S P60. At the time of it’s release, it seemed to be the most advanced vehicle within the market, yet affordable to higher-middle class people. Featuring the lowest drag coefficient at the time of it’s release, it shook the world of automotive industry; and it didn’t stop there. NHRA rated it as the fastest accelerating car on a rolling start.

Image: 612to303 / Youtube

Imagine a vehicle that can go from a relaxed family sedan to an absolutely maddening sports car reaching a hundred kilometre per hours; with just a simple OTA firmware upgrade. Called the “Ludicrous Mode”, the vehicle accelerated from 0-60 in 2.8 seconds.

The not-so-awesome side

It all sounds too good to be true, and it is. As convenient Tesla’s vehicles sound, they are plagued with reliability issues. God help you if you have a faulty Tesla, as you’ll spend a significant amount of time with the servicing in order to fix your car properly. Some of Tesla’s vehicles caught on fire as well; in 2016, a vehicle charging in a Tesla Supercharging station situated in Norway caught on fire.

On the Consumer Reports Car Reliability Survey, only recently the Model S’s reliability rating was rated as above average.

On the flip-side

With Tesla’s recent domination, other automakers are trying to get in on the trend as well. A test mule from Porsche was spotted recently, running on an electric power-train. Nissan’s Leaf was an electric vehicle that successfully penetrated the market as well.

World’s biggest automaker Toyota still dominated the market solely because of the pricing and it’s excellent reliability. Availability of parts is a massive factor when the average consumer decides for a car. Years of experience and research has helped Toyota build up a respectable image within the automotive industry, something Tesla is struggling with.

Expanding into bigger things

A smart decision from Tesla was developing a semi truck. A few days ago, Tesla’s co-founder and CEO Elon Musk revealed the Tesla Semi, a truck that looks straight out of a science fiction flick. With this, Musk continues his vow to start an automotive revolution not just in the sedan category. As the truck came onto the stage of the press conference, out of the container loaded with the semi, Musk drove a revamped Tesla Roadster in front of the audience. If you thought the Model S’s Ludicrous Mode achieved astonishing numbers, the Tesla Roadster accelerates to 60 miles per hour in just under two seconds. Mind boggling yet costing the fraction of the hypercars of today, the brand-new Tesla Roadster aims to be launched in 2020.

Image: Reuters

Tesla has laid down it’s cards in the table, and now it’s time to see what the others have to offer. Tesla claims the cost of driving a Tesla Semi will surpass that of a diesel truck within two years of it’s usage, per mile costing 1.53$ whereas a diesel truck costs 1.82$ per mile. To no speculation, Tesla’s main competitor in the semi-truck market is Volvo, and it’s yet to be seen what Volvo retaliates with.

The future of the future

Undoubtedly, the world looks forward to adopting electric vehicles with open arms. With this however, the world aims to kick out gas powered vehicles as well. The entire world now sees a significant portion of electric vehicles occupying it’s market. Electric and hybrid vehicles accounted for 28% of it’s market share in 2016. The country claims to only sell electric and hybrid vehicles by 2030. India has ambitious plans as well, planning to only sell electric and hybrid cars by 2030. Netherlands being a step ahead plans to implement this massive decision by 2025. Countries like UK and France also plan to ban the sale of petrol and diesel vehicles by 2030, and become carbon neutral by 2050.

Naturally, the question occurs; what’s China thinking? Being the largest producer of plug-in electric cars in the world, selling over 40% of all electric cars in 2016, China says it’ll eventually join into the trend without specifying a concrete timeline. Rumors suggest Elon Musk has been negotiating with the Chinese government on plans of establishing a manufacturing plant in China. When confronted with these rumors, Musk suggested that a move might be made in China based on the demand of Tesla’s cars. He suggested the same about establishing plants in Europe.

What about us?

With the rest of the world rapidly changing, it’s obvious that Bangladesh will join in on the revolution soon. Aiming to be ecologically sane, it’s a move Bangladesh must make in order to stand up the world. Bangladesh has it’s own plans to be fully digitized by 2020. With many of the plans moving forward and the economy looking excellent, it seems that Bangladesh has to adopt plans to fully implement electric vehicle into it’s market. Depleting finite natural resources and increasing buying power calls the urgency of electric and hybrid vehicles now more than ever.

Depleting finite natural resources and increasing buying power calls the urgency of electric and hybrid vehicles now more than ever.

A few Model S have already landed in Bangladesh, albeit unregistered and seen as a symbol of luxury. We believe that over time, electric vehicles will become the norm. Clouds of smog hang still within the air of Dhaka, and it’s getting worse. Building an ecologically functional infrastructure is the only way to overcome these man-made hazards, and implementing a structure of hybrid vehicles is a must for the plans of a Digital Bangladesh. We only hope the higher-ups can understand the future of what the entire world and make Bangladesh just as technologically advanced.