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One Reason I Won't Invest in Tesla

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Written by   186
5 months ago

I talk often about Elon Musk. But that is in part because let's face it—he is an interesting guy to talk about. Plus, being that he is also a bit of a character, and some might even say caricature, he always leaves quite a bit of fodder for a bit of Elon Musk conversation and commentary.

Still, while I have also said many times that Musk is without question a brilliant mind when it comes to business, to date I have never had any interest in investing in his main company Tesla.

I have a lot of reasons for that. And even while I stand by my conviction to not invest in his company, I do also understand that by doing so I have missed out on some incredible potential gains over the years.

It is what it is. Besides, I am tied financially to one of his latest rivals Rivian, and I also happen to be a long-time shareholder of Ford Motor Company.

Aside from the strides Tesla is clearly making, I think Ford is actually very well positioned to do even better than Rivian, dare I say. Ford is also making some rather interesting strides with its own electric vehicle lines, and the two that have the greatest potential to do well are probably the Mustang Mach-E and the Ford F-150 Lightning.

So, I have obvious personal interest in Ford and Rivian and that is one reason I have no interest in Tesla as a company.

But there is another reason I think is worth noting. Essentially I have long thought of Tesla investors as a "different breed." In other words, are they investing in the company or the concept? Are they investing in the cars or Elon Musk? Are they investing in future profits or an ideology?

It just seems to me that Tesla investors would be more akin to what we refer to in the investing world as "activist shareholders." In other words, their interests are not necessarily in the company itself, but advocating certain influences and causes that are not always aligned directly with what is best for the company as a whole.

I say this as Musk recently announced he was cutting his salaried workforce by 10%. Normally an announcement like this would send shares soaring, especially considering part of the reason Musk cited being that there were too many unnecessary positions currently.

Image courtesy of Pixabay, user 81349. Environmental Protection - Free photo on Pixabay

Usually this is good news for investors. But this announcement caused shares to plummet 8%. And shares have plummeted many times in the past under "less than usual" announcements and happenings, leading me to believe that the investors of the company have different interests than a traditional shareholder would have—and on a large enough scale that it impacts the share price.

This is not the kind of investment I want to be part of. I want to invest in a company. In a business. And I want the performance of the stock to be in line with things that make businesses go. Not what a large swath of investors thinks is best for the workers or best for the environment and so and so forth.

It is not the purview of the investor. The investor's job is to make money and the expectation for the company's leadership is to do whatever is necessary to deliver profits.

So, among a variety of reasons I don't invest in Tesla, this is certainly one of them.

Lead image courtesy of Pixabay, user Blomst. Tesla Supercharger Battery - Free photo on Pixabay

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Have you driven/owned an electric vehicle?

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5 months ago

Not a single one owned nor driven.

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3 months ago

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5 months ago