If you were investing in an initial public offering, would you not want the company’s chairman, chief executive and “product architect” – the most important individual to the enterprise – at least to work full-time?
I ask this because Elon Musk, the chairman and chief executive of Tesla Motors, the electric car maker that held its Nasdaq IPO successfully on Tuesday, does not.
Mr Musk is already a controversial figure, having admitted just before the IPO that he had run out of cash as a result of investing $74m of his money into Tesla, and being in the middle of a messy divorce. His wife Justine Musk has been adding her own thoughts about Tesla on her blog.
The IPO prospectus has this to say about Mr Musk:
“Although Mr Musk spends significant time with Tesla and is highly active in our management, he does not devote his full time and attention to Tesla. Mr Musk also currently serves as chief executive officer and chief technical officer of Space Exploration Technologies, a developer and manufacturer of space launch vehicles and chairman of SolarCity, a solar equipment installation company . . .
“Mr Musk is currently engaged in divorce proceedings and previously entered intoa post-nuptual agreement which provides that the holdings of the trust, including Mr Musk’s share of our capital stock, shall remain solely his property. This post-nuptual agreement has been upheld by the Superior Court of Los Angeles though such decision may be subject to an appeal . . .
“However, we do not believe that the divorce proceedings will result in Mr Musk owning less than 65 per cent of the capital stock held by him . . . We do not expect the divorce proceedings to have a material impact on Mr Musk’s ability to serve as our chief executive officer and chairman.”
Tesla investors should consider all this carefully, I think.
