Elon Musk’s brain fart provides some interesting insights into the challenges of leadership.
I don’t know if you’ve been following the fortunes of the charismatic lead vocalist for Tesla, Elon Musk.
The SEC has just forced him to resign from being Tesla’s chairman for three years, but is allowing him to stay on as CEO… for now.
It’s all part of a settlement, and there’s still a chance he could do some prison time for fraud.
What did he do wrong? This tweet:
That is, he was saying there was a firm offer on the table to buy Tesla at $420 a share.
That’s some big news for a public company.
Only problem was, it wasn’t true. There was no firm offer on the table. It wasn’t even clear if he was actually in talks with anyone. He later reckoned that he was talking to some oil money dudes from Saudi Arabia, but the SEC reckons that phone call only lasted 30 mins, and you really need to have something on paper before you go announcing anything to the market anyway.
The SEC also reckon that Musk just made the price of $420 up. Musk said that he applied the usual 20% premium on current market rates to get to $419, and then just rounded it up a dollar.
The SEC reckons it was an allusion to 4:20 Cannabis Culture (Musk smoked a joint on a recent podcast), and was mostly aimed at amusing his rock-star girlfriend.
(Such a bad boy billionaire).
Anyway, in sum, they reckon, it amounts to making false and misleading statements and market manipulation. Both are punishable with jail time.
We’ll see. The thing I find interesting about this is the double standard that seems to be applied here.
I mean, take Donald Trump. He pulls this kind of business all the time. He’s famous for dropping bombs all over Twitter all the time.
He called the North Korean president, and a potential nuclear enemy, “little rocket man”.
Twitter is made for mouthing off whatever is on your mind. That is literally what it’s designed for. It’s not the place for prosaic, “official” communications.
But then Trump did blur that line. If you wanted to keep up to speed with the POTUS, you needed to follow him on social media.
And Musk must have known it would have a huge impact on Tesla’s share price. He must have known that, which is why it was so monumentally stupid. It really looks like he was high when he wrote it.
You get the sense that Trump (who has never had a drink in his life) is pretty measured and calculating with his Tweeting.
But the other question with this is, what is Tesla without Musk?
Tesla is an aspirational company. It’s got a lot of promise, even if it isn’t making money yet.
But to get to the point where it starts making money, it needs everyone backing it to hold the faith. To keep believing.
In that sense, Musk is the cheer-leader in chief. He is a compelling and fascinating character. He makes Tesla sexy.
And without him, they could become just another tech company or auto-maker.
As I’ve said before, leadership isn’t entirely technical. In large part, it’s about keeping talented and driven people inspired and motivated.
You’ve got to use whatever tools necessary…
… but maybe not Twitter so much.