Musk's asset accrual and paying for Mars

[FutureSpaceTourist]

https://twitter.com/thesheetztweetz/status/1295718621415649282

Elon Musk is now the world's 4th richest person, Bloomberg reports, with an $84.8 billion fortune. Musk's wealth has grown by more than $57 billion this year.

https://www.bloomberg.com/news/articles/2020-08-17/musk-gains-8-billion-to-become-world-s-fourth-richest-person

[Asteroza]

Doesn't his Tesla compensation package have some stock goals, which if he hits will drop even more money/stock on him? Will those trigger anytime soon?

[AC in NC]

Doesn't his Tesla compensation package have some stock goals, which if he hits will drop even more money/stock on him? Will those trigger anytime soon?

These are the tranches by Market Cap (average over 6 months) and requiring the coupling of an additional financials achievement metric.  He just secured the first tranche in 2Q2020 but current market cap would support the 6th tranche if the other metrics were achieved.

There is however a 5 yr holding period after each tranche vests.

https://www.sec.gov/Archives/edgar/data/1318605/000119312518035345/d524719ddef14a.htm#toc524719_14

[Redclaws]

I’m confused - current market cap is almost exactly 350 billion.  That’s several tranches further...?

[AC in NC]

I’m confused - current market cap is almost exactly 350 billion.  That’s several tranches further...?

My bad.  I thought it was higher too but checked Yahoo Finance and swore it said $200B.  Editing above to reflect.

[oldAtlas_Eguy]

I’m confused - current market cap is almost exactly 350 billion.  That’s several tranches further...?

My bad.  I thought it was higher too but checked Yahoo Finance and swore it said $200B.  Editing above to reflect.

Since the Tranche's are given based on the last 6 months of closings average stock price. Currently today that is a average stock price of ~$967. Not far away from the next Tranche at the sustained average Market Cap over a 6 month period of $200B+. Need an average 6 month of closings stock price of $1035+ to achieve the next tranche and next issuance of stock bonus. It will only take 7 or 8 more closings with a price at or above $2000 for the next Tranche of $200B average Market Cap to be reached. That award would be worth at $1000 a share $1.23B but at $2000 a share it is worth $2.46B.

If the stock price continues at or above $2000 for the next 7 weeks then the next Tranche at the average Market Cap of $250B will be reached around the first of Nov. This one would add another $3B+ to Musk's net holdings in TESLA.

But in current values Musk's assets have grown an ~$20B in just a month between Tesla and SpaceX stock prices and company valuations. He was $87B now he is approaching $110B in assets. Putting 10% of his assets at >$10B the purported total cost of the establishment/foothold of a Mars colony.

[M.E.T.]

I’m confused - current market cap is almost exactly 350 billion.  That’s several tranches further...?

My bad.  I thought it was higher too but checked Yahoo Finance and swore it said $200B.  Editing above to reflect.

Since the Tranche's are given based on the last 6 months of closings average stock price. Currently today that is a average stock price of ~$967. Not far away from the next Tranche at the sustained average Market Cap over a 6 month period of $200B+. Need an average 6 month of closings stock price of $1035+ to achieve the next tranche and next issuance of stock bonus. It will only take 7 or 8 more closings with a price at or above $2000 for the next Tranche of $200B average Market Cap to be reached. That award would be worth at $1000 a share $1.23B but at $2000 a share it is worth $2.46B.

If the stock price continues at or above $2000 for the next 7 weeks then the next Tranche at the average Market Cap of $250B will be reached around the first of Nov. This one would add another $3B+ to Musk's net holdings in TESLA.

But in current values Musk's assets have grown an ~$20B in just a month between Tesla and SpaceX stock prices and company valuations. He was $87B now he is approaching $110B in assets. Putting 10% of his assets at >$10B the purported total cost of the establishment/foothold of a Mars colony.

I’m quite interested in how conservative Bloomberg and Forbes are in their assessments - Bloomberg being the more generous of the two and still placing Musk at about $95B as of today - about $15B less than your $110B estimate.

[ncb1397]

If the stock price continues at or above $2000 for the next 7 weeks then the next Tranche at the average Market Cap of $250B will be reached around the first of Nov. This one would add another $3B+ to Musk's net holdings in TESLA.

You are completely ignoring other requirements. The requirements for the 2nd tranche is $35 billion in annual revenue. Revenue over the last 4 quarters was $26 billion. There are other requirements on top of that.

[Asteroza]

I imagine the stock split is going to make some of those calculations quite interesting as well...

[M.E.T.]

I imagine the stock split is going to make some of those calculations quite interesting as well...

It shouldn’t. The KPI is market cap, not price per share.

[OTV Booster]

I've a question that may not be directly related. I'm just not sure. There are different business models possible for TBC tunnels.


One model is for TBC to either retain ownership or sign a long term operating contract. Another proposed element is an Uber like relationship with private jitney operators.


California has been creating seismic heaves in the transportation industry in general and Uber in particular with new interpretations of the differentiation between employees and contract workers.

https://arstechnica.com/tech-policy/2020/08/uber-ceo-warns-california-ruling-could-force-a-months-long-shutdown/[/size][/font]


Is there a workable mechanism to allow a jitney operator to 'buy in' to (example) the LA tunnel complex and become a for real partner that is a win for everybody and increases value all around?


Phil

[oldAtlas_Eguy]

I've a question that may not be directly related. I'm just not sure. There are different business models possible for TBC tunnels.


One model is for TBC to either retain ownership or sign a long term operating contract. Another proposed element is an Uber like relationship with private jitney operators.


California has been creating seismic heaves in the transportation industry in general and Uber in particular with new interpretations of the differentiation between employees and contract workers.

https://arstechnica.com/tech-policy/2020/08/uber-ceo-warns-california-ruling-could-force-a-months-long-shutdown/[/size][/font]


Is there a workable mechanism to allow a jitney operator to 'buy in' to (example) the LA tunnel complex and become a for real partner that is a win for everybody and increases value all around?


Phil

When it comes to DOT state regulations. Each state has its own bookshelf (sometimes several bookshelves).

But as far as Musk's assets accrual. The linkage between TBC and Tesla as the provider of the people mover element for TBC fixed infrastructure provides significant cost savings synergies as well as profit synergies for the two. At the moment TBC's impact on Musk's assets is not very significant but could play a more significant role if more and larger TBC contracts for infrastructure emplacement and then operations from government entities occurs.

[OTV Booster]

I've a question that may not be directly related. I'm just not sure. There are different business models possible for TBC tunnels.


One model is for TBC to either retain ownership or sign a long term operating contract. Another proposed element is an Uber like relationship with private jitney operators.


California has been creating seismic heaves in the transportation industry in general and Uber in particular with new interpretations of the differentiation between employees and contract workers.

https://arstechnica.com/tech-policy/2020/08/uber-ceo-warns-california-ruling-could-force-a-months-long-shutdown/[/size][/font]


Is there a workable mechanism to allow a jitney operator to 'buy in' to (example) the LA tunnel complex and become a for real partner that is a win for everybody and increases value all around?


Phil

When it comes to DOT state regulations. Each state has its own bookshelf (sometimes several bookshelves).

But as far as Musk's assets accrual. The linkage between TBC and Tesla as the provider of the people mover element for TBC fixed infrastructure provides significant cost savings synergies as well as profit synergies for the two. At the moment TBC's impact on Musk's assets is not very significant but could play a more significant role if more and larger TBC contracts for infrastructure emplacement and then operations from government entities occurs.

Worse yet, there is both federal and state DOT's. intrastate generally comes under local DOT. There is a strong differentiation between private and commercial transport at both levels and Hours of Service (logging) issues. But when it comes to contract vs employee classification it's the Department of Labor's bailiwick. Then it gets too weird to go into.


For employee/contract labor in the LA Tunnelplex California DOT and labor laws hold. The feds used to have 20 or 21 questions used in the determination and there was no scoring. It boiled down to the general sense of the responses. In the new California law there is one key provision that has raised a lot of noise. Specifically, if the contract labor does the type of work as the contracting entity, the contractor is an employee.


This impacts Lease Owner Operators in trucking and programmers in the computer industry. Lease operators are the point pertinent to this issue.


One business model in trucking is a truck owner leasing the truck to a company and driving it. The company in turn provides Operating Authority, permits, gets loads, handles dispatch, a mind numbing amount of paperwork and touches many stations of the cross.


In California intrastate transport this driver would be classified as an employee. This is close to the Uber model and is what brought on my initial question. Would an Uber like model work if the driver 'buys into' a TBC managed tunnel system. In other words, if the driver had an investment beyond owning the vehicle could they be 'not an employee'?


This is probably too esoteric an issue for this thread and should be dropped. At this point I offer it up as food for private thought on some of the hidden complexities of the transportation kabuki dance.


Phil

[butters]

Sen. Cory Gardner (R-CO) has introduced budget amendments proposed by his constituent, ULA, to place restrictions on NASA contracting with companies that have financial ties to the Chinese government -- or which share ownership with other companies that have such financial ties. The objective is to scrutinize NASA's contracts with SpaceX on the grounds that Tesla has received loans from Beijing. The stated rationale is that China could put financial pressure on Elon Musk to transfer sensitive information or technology. Anonymous industry executives say this is what Elon deserves for poking the bear on the Russian RD-180.

https://www.washingtonexaminer.com/policy/defense-national-security/elon-musks-spacex-nasa-contracts-threatened-over-tesla-china-ties

[envy887]

Sen. Cory Gardner (R-CO) has introduced budget amendments proposed by his constituent, ULA, to place restrictions on NASA contracting with companies that have financial ties to the Chinese government -- or which share ownership with other companies that have such financial ties. The objective is to scrutinize NASA's contracts with SpaceX on the grounds that Tesla has received loans from Beijing. The stated rationale is that China could put financial pressure on Elon Musk to transfer sensitive information or technology. Anonymous industry executives say this is what Elon deserves for poking the bear on the Russian RD-180.

https://www.washingtonexaminer.com/policy/defense-national-security/elon-musks-spacex-nasa-contracts-threatened-over-tesla-china-ties

So that's why Gardner is writing op-eds about China in SpaceNews.

This all seems like a stretch, since the PRC doesn't own any of Tesla, and Tesla doesn't own any of SpaceX.

[Brovane]

“What is there to stop them from going to Musk directly and saying, 'We'll call your line of credit early, unless you give us X, Y, or Z?'” said a congressional Republican aide involved in negotiations over the comprehensive legislation governing the space agency.

Wouldn't the terms of the loan have to allow it to be called early in order for this scenario to happen? 

"Such legislation could put SpaceX at a disadvantage given that Musk’s Tesla secured a line of credit worth approximately $1.4 billion from Chinese state-owned banks in December."

Tesla could pay that line of credit at any time if they wanted.  Tesla has $9B cash on hand at the end of Q2-2020. 

[su27k]

Sen. Cory Gardner (R-CO) has introduced budget amendments proposed by his constituent, ULA, to place restrictions on NASA contracting with companies that have financial ties to the Chinese government -- or which share ownership with other companies that have such financial ties. The objective is to scrutinize NASA's contracts with SpaceX on the grounds that Tesla has received loans from Beijing. The stated rationale is that China could put financial pressure on Elon Musk to transfer sensitive information or technology. Anonymous industry executives say this is what Elon deserves for poking the bear on the Russian RD-180.

https://www.washingtonexaminer.com/policy/defense-national-security/elon-musks-spacex-nasa-contracts-threatened-over-tesla-china-ties

My reading of the article is that the original amendment is already dead, the new compromise is "establish a self-certification process for companies to affirm that no Chinese entity is even a minority owner. ", and they're just arguing about the punishment right now. Seems to me this compromise no longer has any impact on SpaceX.

Also I don't see how the original amendment wouldn't have impacted Boeing too, they sell a lot of planes to China.

[Billium]

Tencent (a Chinese tech company) bought about 5% of Tesla back in 2017. Tencent is also related to the list of sanctioned Chinese tech companies with these recent TikTok/We Chat concerns. Really it is very loosely connected to an impact with SpaceX, so I'm not sure there should be any concern from the US side, but these are weird and crazy times so who knows what will happen.

Conversely, I think as Starlink becomes operational, China will have huge leverage over Elon. Ie. "Hey Elon, if you want Tesla to do business in China, you need to do x with Starlink." I think it would be best for Elon to divest his Tesla ownership at this time (before the "window closes" to use his phrase). He will then have a pot of money for Mars, and also he can't be blackmailed by China due to Tesla's China operations. I know Elon is not going to sell his shares, he just wont.

I guess another way to put it, is that blackmail by China over operations in China is the biggest concern, not some little bit of ownership. But then Boeing has huge exposure to this as well, so that kind of cuts against ULA too.

[OTV Booster]

“What is there to stop them from going to Musk directly and saying, 'We'll call your line of credit early, unless you give us X, Y, or Z?'” said a congressional Republican aide involved in negotiations over the comprehensive legislation governing the space agency.

Wouldn't the terms of the loan have to allow it to be called early in order for this scenario to happen? 

"Such legislation could put SpaceX at a disadvantage given that Musk’s Tesla secured a line of credit worth approximately $1.4 billion from Chinese state-owned banks in December."

Tesla could pay that line of credit at any time if they wanted.  Tesla has $9B cash on hand at the end of Q2-2020.

Your thinking too legalistically. Pressure does not have to come in any particular form. How many Chinese forms does Tesla/China have to fill out every year? Most is bureaucratic BS like any company does in any country. Each one offers a chance to gum up the works.


That said, it works the other way for Chinese companies operating in the US. For every TicToc story how many don't we hear about?


The old International tit for tat is there. The difference with Elon/Tesla is the stakes can be high. Not saying this is even on the horizon, but it is, politicking aside, a non zero possibility. Ah, what a Bogart movie it would be.

[M.E.T.]

ULA resorting to this now, are they? Desperate to stave off the inevitable.

What a piece of work.