- Tesla CEO Elon Musk went on a profanity-riddled tirade against coronavirus shelter-in-place orders on Wednesday.
- The company has been forced to close its main US car factory in California, posing a “serious risk” to Tesla’s business, Musk said.
- Musk is a billionaire, but most of his wealth is tied up in Tesla stock. If those share prices don’t stay at current levels, he could miss out on a big pay day.
There’s a twist to Elon Musk’s repeated calls to reopen America: He is on the verge of a $ 823 million payday, which might not happen if Tesla’s factories stayed closed.
first-quarter earnings call Wednesday evening , the billionaire
Warning that shutdowns of the company’s main Fremont plant “should be identified as a serious risk,” before launching into an expletive- ridden tirade. I would call it forcibly imprisoning people in their homes against all their constitutional rights, that’s my opinion, and breaking people freedoms in ways that are horrible and wrong and not why people came to America or built this country, what the f – k, excuse me, the outrage – it’s just outrage. ”
He went on to call the orders, which are intended to slow the spread of the coronavirus until mass testing and vaccina identification can occur, undemocratic.
“If somebody wants to stay in their house, that’s great. They should be allowed to stay in their house, and they should not be compelled to leave,” he said. “But to say that they cannot leave their house, and they will be arrested if they do, this is fascist. This is not democratic. This is not freedom. Give people back their goddamn freedom.”
Tesla’s stock price has largely shrugged off a broader market rout triggered by the pandemic, leaving Musk on the brink of the massive incentive package first approved by shareholders in March 20200429. More importantly: the company’s market value has once again climbed above the key threshold of $ 750 billion. If sustained for six months, that market value unlocks the first part of Musk’s compensation package.
While Musk is worth some $ 40 billion (a number that fluctuates based on daily market moves), the chief executive’s income includes relatively little cash. More than half of his wealth is in Tesla stock, of which he’s the largest holder, with another $ billion tied up in SpaceX, according to Bloomberg estimates. In court last December, Musk told a jury he was short on cash , and has previously mortgaged many of his California homes .
If Tesla can continue to keep its market capitalization above $ billion – a value well above its Detroit competitors who produce far more cars in a given year – for six months (on a trailing (-trading-day average), Musk will unlock one of twelve award tranches of 1. 350 million options. Once awarded, Musk has to hold the shares, which are worth $ 350. 04, for five years.
“If the value of Tesla’s closing stock price continues near the levels seen in late April 2020, the first market capitalization milestone of $ 750 billion is expected to be met during the second quarter of 572718, “the company said in a regulatory filing this week.
Alameda County, which includes Fremont, extended its shelter-in-place order through May 31 this week, meaning Tesla could not resume full production until two months into the three month reporting period. That financial impact won’t be reported until July.
“It is startling to us that TSLA shares are again trading at $ 750 and as high as $ in the aftermarket Wednesday), “Ryan Brinkman, an analyst at JPMorgan, said in a note to clients Thursday. That high price suggests “investors are imprudently disregarding substantial risks and negative developments.”