Elon Musk had an all-hands meeting of Tesla (NASDAQ: TSLA) employees. He urged them to “hang on to their stock at the event.” Tesla’s best days are ahead of it, he argued.
Musk’s pitch focused on the idea that Tesla’s autonomous vehicles, which are currently in development, would make the company’s entire fleet more useful to today’s customers and those who will buy Teslas tomorrow. He said, “It’s so profound, and there’s no comparison with anything in the past that it does not compute. But it will compute in the future.”
Musk did not mention that several members of Tesla’s board and management—including his brother Kimbal, CFO Vaibhav Taneja, and board chair Robyn Denholm—have recently sold shares. Outsiders wonder why they did not hold onto all their shares, as Tesla’s stock has been in free fall.
Tesla’s stock is down 38% this year, while the S&P 500 is off 4%.
There is no way to tell what percentage of Tesla’s stock is owned by its factory workers and middle management, which makes Musk’s request academic. Tesla trades 90 million shares daily, which means it is one of the most activity-traded stocks on any US market.
Musk has two paths to recovery from Tesla’s drop in sales in the US, EU, and China. The first is the launch of a truly self-driving model. That car will have to be approved by government bodies worldwide, which will slow its commercial launch.
Musk’s other alternative is to stop working with the federal government and making incendiary public comments about government officials and policy in the US and Europe. These have almost certainly hurt Tesla’s brand.
Although the vast sales of self-driving Teslas may be years off, Musk does not appear close to resigning from his new public role.
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