Elon Musk has a history of well documented personal vendettas against many people and organizations. This does not bode well for the future of his companies, as demonstrated in a recent 60 Minutes interview.
“I want to be clear, I do not respect the SEC, I do not respect them,” Elon Musk stated during an interview with 60 Minutes. Considering that SEC violations have cost Tesla and Musk $20 million each, it’s natural to assume that Musk would take the SEC more seriously. But instead, the South Africa-born billionaire has seemed to develop a personal vendetta against the SEC since he was fined for a series of tweets he posted.
In September, Musk reached a settlement with the SEC over charges of fraud relating to a tweet in which he claimed to have the “funding secured” to take Tesla private. Under the terms of the settlement, both Musk and Tesla paid a $20 million fine to “be distributed to harmed investors under a court-approved process,” and Musk was barred from acting as the chairman of Tesla for two years — although he would still maintain his role as CEO and he would not have to admit guilt in the matter.
When asked if his tweets were now being reviewed by the Tesla board, Musk stated: “The only tweets that would have to be reviewed would be if a tweet had a probability of causing a movement in the stock… Otherwise, it’s … hello First Amendment. Freedom of speech is fundamental.” The interviewer seemed surprised by Musk’s flippant attitude and asked: “But how do they know if it’s going to move the market if they’re not reading all of them before you send them?” To which Musk simply replied: “I guess we might make some mistakes. Who knows?”
It was then that Musk decided to further demonstrate his blatant disregard for the SEC’s authority by stating: “I want to be clear, I do not respect the SEC, I do not respect them,” to which the interviewer asked, “But you’re abiding by the settlement, aren’t you?” Musk simply stated: “Because I respect the justice system.” Musk has previously demonstrated his blatant disregard for the SEC, referring to them as the “Shortseller Enrichment Commission” after being fined for his questionable tweets.
Just want to that the Shortseller Enrichment Commission is doing incredible work. And the name change is so on point!
— Elon Musk (@elonmusk) October 4, 2018
Part of the SEC’s settlement with Musk and Tesla required him to step down as chairman of the board of Tesla and appoint an independent chairman. Instead of appointing a truly independent chairman, Tesla allowed Musk to name his hand-picked choice Robyn Denholm as his replacement as chairperson of the board. Denholm’s impartiality has been brought into question multiple times and she has been identified as a member of Musk’s “inner circle.” During the interview with 60 Minutes, the interviewer discussed Denholm’s appointment saying: “The impression was that she was put in to kind of watch over you… Like a babysitter…”
Musk replied: “Yeah. It — it’s not realistic in the sense that I am the largest shareholder in the company. And I can just call for a shareholder vote and get anything done that I want.” While Musk may be following the SEC’s guidelines to some extent, it appears that he is still flagrantly pulling strings within the company in order to get his own way.
The SEC is just one of the many vendetta’s Musk appears to have developed. Another has been with the British hero cave diver who saved a Thai soccer team from an underground cave filling with water, Vern Unsworth. After Unsworth criticized Musk’s plan to send a miniature submarine to rescue the soccer team, Musk lashed out at Unsworth and referred to him as a “pedo guy,” on Twitter. In later tweets, Musk claimed that Unsworth had a “child bride” despite seemingly having no evidence to support this claim. This personal vendetta could also end up costing Musk. Unsworth has sued him for defamation, a suit that Musk may have too much personal pride to settle out of court. In the latest update to this case, Musk’s lawyers asked the court to dismiss the case, arguing that readers don’t believe Musk’s claims on social media. The SEC certainly disagreed with this argument when it came to the “funding secured” tweet discussed above.
Perhaps the great personal vendetta Musk has developed is against short sellers, investors who bet against Tesla succeeding.
In August, Musk became emotional and teared up during an interview with the New York Times, at one point blaming Tesla short-sellers for his many troubles. “I thought the worst of it was over — I thought it was,” said Musk during the interview. “The worst is over from a Tesla operational standpoint. But from a personal pain standpoint, the worst is yet to come.” Musk stated that he was bracing for “at least a few months of extreme torture from the short-sellers, who are desperately pushing a narrative that will possibly result in Tesla’s destruction.” Referring to the short-sellers Musk stated: “They’re not dumb guys, but they’re not supersmart. They’re O.K. They’re smartish.”
Musk has previously stated his opinion that short-selling should be illegal and called short-sellers “value destroyers.” Musk responded to one Twitter users criticism of short-selling stating: “Short-sellers are value destroyers. Should definitely be illegal.”
Exactly. Short-sellers are value destroyers. Should definitely be illegal.
— Elon Musk (@elonmusk) October 4, 2018
Some, however, challenged Musk on this such as financial analyst Meb Faber who pointed out that many short-seller had exposed scams and predatory financial practices through their work:
We have one of the great short sellers in history on the podcast next week. Has literally exposed dozens of frauds and scams that were predatory at lost people so much $$$$…
I love Elon/Tesla but this is totally backwards…not all shorts are bad, not all longs are good… https://t.co/OUNIUaSrin
— Meb Faber (@MebFaber) October 5, 2018
Later in his interview with 60 Minutes, Musk discussed his consistent failure to accurately predict production goal dates. Musk stated: “People should not ascribe to malice that which can easily be explained by stupidity. So — so it’s, like, just because I’m, like, dumb at — at predicting dates does not mean I am untruthful. I don’t know– I– we’ve — I never made a mass-produced car. How am I supposed to know with precision when it’s gonna get done?”
Musk appears to be claiming ignorance here for his consistent failure to meet production deadlines, and while this may seem believable to some viewing the company from outside, both the DOJ and the SEC have begun investigations into the company’s production figures. The investigation aims to determine whether or not Musk purposefully misled investors on Model 3 production figures as the company failed to produce as many vehicles as they claimed. Asking to what extent these production problems have been made worse by Musk’s personal vendettas seems like a reasonable question at this point.
It shouldn’t be hard to understand why a CEO consistently failing to meet production deadlines — set by his management team and himself — does not instill confidence in his ability to efficiently run a company. Throughout the 60 Minutes interview, Musk appeared to become emotional discussing his Twitter account and the situation with the SEC, further insulting an agency which has already cost him and his company $40 million. He appeared to brush off reports of employee injuries and completely disregarded any criticism of the electric-car manufacturer.
While it’s true that many CEO’s and forward thinkers can be eccentric or erratic at times — such as Steve Jobs, Bill Gates and a host of other entrepreneurs — the majority of those in the tech field created a game-changing technology through their own hard work and private investments. They also built teams to execute on their visions. Many of these technologies have had a huge effect on the world and overall improved the lives of those that use them. In comparison, Musk has consistently failed to develop the projects that he undertakes, oversells his products capabilities and receives tax-payer funded subsidies to continue his multitude of projects.
Recent reports have also outlined Musk’s “rage firings” which are apparently a common practice in which the Tesla CEO will fire workers for minor issues or mistakes, many of which often have nothing to do with that worker’s job. Wired followed the story of one young engineer hired to work at Tesla, describing the moment leading up to his firing:
“Hey, buddy, this doesn’t work!” Musk shouted at the engineer, according to someone who heard the conversation. “Did you do this?”
The engineer was taken aback. He had never met Musk before. Musk didn’t even know the engineer’s name. The young man wasn’t certain what, exactly, Musk was asking him, or why he sounded so angry.
“You mean, program the robot?” the engineer said. “Or design that tool?”
“Did you fucking do this?” Musk asked him.
“I’m not sure what you’re referring to?” the engineer replied apologetically.
“You’re a fucking idiot!” Musk shouted back. “Get the fuck out and don’t come back!”
The young engineer climbed over a low safety barrier and walked away. He was bewildered by what had just happened. The entire conversation had lasted less than a minute. A few moments later, his manager came over to say that he had been fired on Musk’s orders, according to two people with knowledge of the situation. The engineer was shocked. He’d been working so hard. He was set to get a review from his manager the next week, and had been hearing only positive things. Instead, two days later, he signed his separation papers.
Unfortunately, it appears as if the CEO’s reaction towards the young engineer was not an isolated incident, random firings were apparently commonplace and many employees walked on eggshells, terrified of upsetting Musk. Wired claims that one manager had nicknamed these incidents “Elon’s rage firings,” and had forbidden employees from walking too close to Musk’s desk at the Gigafactory for fear that they may lose their job if the CEO was having a bad day. These erratic actions further add to a growing consensus that Musk is not stable enough to run a company efficiently, and provide more evidence that he is a man fueled by personal vendettas.
Musk’s interview with 60 Minutes did not portray Musk as the Tony Stark-style, awkward but visionary futurist that many wish him to be, but rather showed an erratic, emotional individual who holds a grudge and appears convinced that the world is unjustly out to get him. His emotional nature and personal vendettas are already having a negative effect on the companies he runs, and show all the signs of getting worse in 2019.
What Musk fails to understand is that those critical of him do not take issues with his ideas of creating a better future — they take issue with the business practices he employs to complete his personal projects at the expense of the American taxpayer and investors around the world.