Eoin Treacy's view -
We listened to Catherine Wood, founder and CEO of ARK Investment Management, LLC, expound to CNBC anchors why her firm was adamantly opposed to Elon Musk’s proposal to take Tesla, Inc. (TSLA-Nasdaq) private. Her argument was that ARK’s research showed that by 2023 annual electric vehicle (EV) sales would be 17 million units per year worldwide. Tesla, because of its focus on software, its ability to collect the driving mileage of its vehicle purchasers, and its vision about Mobility-as-a-Service (MaaS), coupled with its ability to create a fleet of four million EV taxis, would be worth nearly $1 trillion, in less than five years, earning shareholders a 17-fold return from the current share price.
The day following this interview, Mr. Musk announced he was dropping the idea of taking Tesla private. He stated that he changed his mind because his shareholders told him that they didn’t want him to make such a move. Was Ms. Wood one of those shareholders Mr. Musk decided to listen to? He had spent an incredible amount of time and energy since his tweet about privatizing Tesla in preparing for the move, as well as defending himself from a Securities and Exchange Commission (SEC) investigation about possible investment fraud. That inquiry will not go away as easily as merely changing his mind, and we have yet to hear from the plaintiffs’ attorneys.
A link to the full report is posted in the Subscriber's Area.
The emissions cheating scandal and the increasing utility of electric vehicles means established auto manufacturers have to spend very large sums to retool and get electric vehicles to market. Audi announced yesterday it has started production of its electric SUV and Daimler said today that it is going to spend more than €10 billion to develop its electric vehicle fleet.
This section continues in the Subscriber's Area. Back to top