Elon Musk
Patrick Pleul - Pool/Getty ImagesTesla CEO Elon Musk responded to a year-old tweet with a thinking emoji at about 2 a.m, reminding investors that there is rarely a dull day when investing in the electric vehicle leader.
The tweet came from a Tesla (ticker: TSLA) investor — with a verified account —proposing that Musk form a holding company called X. The company would house all of Musk’s ventures including Tesla, SpaceX, the Boring Company, which makes tunnels, as well as brain research company Neuralink.
The goal of the holding company would be to ensure the survival of the human race for millennia. That’s beyond the time horizon of most investors.
Tesla stock isn’t doing much off the tweet. Shares were down about 0.8% in premarket trading. S&P 500 and Dow Jones Industrial Average futures were both up about 0.1%.
It’s a fun idea to consider, but it might be tough to justify. The biggest synergy between the largest two enterprise — Tesla and SpaceX — is Musk himself. The business fundamentals of space and cars are very different. Both require good engineers, but one is relatively low volume, high cost, high complexity — and has nothing to do with batteries. That’s space. The other is battery-based, mass production with a more maniacal focus on costs plus a very different regulatory framework.
“An Elon holding company is the last thing investors want to see on the cusp of this massive stock sale,” Wedbush analyst Dan Ives told Barron’s. “Knowing Elon, a holding company given his Tesla and SpaceX holdings is something he could morph into over time although the next few years this is not the right move in my opinion.”
So some sort of holding company with Musk’s own shareholdings might be possible. Who knows if that is really likely or what it would the holding company would look like? Tesla didn’t respond to a request for comment about holding company X.
The tweet is a reminder that investing in Tesla is never dull. In 2021, Musk has battled — on Twitter — with President Biden, multiple senators, potential NHTSA hires as well as poking fun at Amazon.com (AMZN) founder Jeff Bezos. There is always something, beyond basic cars, to think about when investors are thinking of Tesla.
X might be the best name for his company, but United States Steel (X) already trades under stock symbol “X.” Musk might have some trouble getting the ideal stock ticker.
Write to Al Root at allen.root@dowjones.com
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