Skip to Content
Stock Analyst Update

What Would Tesla Be Without Musk?

We think it would be harmful to investors for the SEC to ban Musk from running a public company.


 Tesla (TSLA) CEO Elon Musk issued a blog post late on Aug. 24 saying that after meeting with the board and large and small Tesla shareholders, Tesla will remain a public company. We are not changing our fair value estimate on this news. We are not surprised to read Musk's meetings revealed concerns from shareholders about being able to own equity in a private company. His Aug. 24 post said, "There is also no proven path for most retail investors to own shares if we were private. Although the majority of shareholders I spoke to said they would remain with Tesla if we went private, the sentiment, in a nutshell, was 'please don’t do this.'" It also said institutional investors have internal compliance rules limiting private ownership. As we discussed in our Aug. 13 note, it was not clear to us how retail investors who are not accredited investors would be able to keep their equity if Tesla went private. We speculated a special purpose vehicle would be publicly traded for retail investors.

Musk reiterated on Aug. 24 that he believes he has more than sufficient funding to take Tesla private, but this initial claim in an Aug. 7 tweet is reportedly under investigation by the Securities and Exchange Commission via subpoenas to board members. Given Musk said he had a July 31 meeting with the Saudi Arabian sovereign wealth fund, we think it may be difficult for the SEC to say the Aug. 7 "funding secured" tweet was untruthful and purely designed to hurt the short sellers that Musk despises. We also think at this time that it would be harmful to investors for the SEC to ban Musk from running a public company. We think for now Musk is effectively Tesla and without him Tesla is just a capital-intensive automaker burning cash with too much debt due soon. Musk revealed in a recent New York Times interview that the company has searched for a COO in the past to take some pressure off him. We think that is a good idea but we think it will be hard to find someone willing to take the job.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

David Whiston does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.