So Musk Now Owns 22 Percent of Tesla, But Does It Matter?

by Mark Stevenson

Published: January 30th, 2016

so musk now owns 22 percent of tesla but does it matter

The automotive and tech blogs are aflutter Saturday with news that Elon Musk has gobbled up another chunk of Tesla stock — this time at a discount.

Musk exercised and held a stock option this week that saw the multi-billionaire increase his ownership of Tesla Motors by 532,000 shares. In total, those shares are worth over $101 million as of the last closing price of $191.20/share.

Here’s where the discount comes in: Musk’s option dictated a price pegged to the share value as of Dec. 4, 2009, before the automaker went public, of $6.63/share — or just over $3.5 million.

Sounds like Elon got a stellar deal. But does any of it matter? Is owning 1/5th of Tesla a big deal?

Surely, picking up many fistfuls of shares at a discount and paying out of your own pocket to hold those shares is noteworthy; Musk is $50 million lighter now thanks to the taxes and fees associated with the decision to hold.

And yes, this does increase Musk’s ownership of the company to 22 percent — or a rounded 1/5th, as one outlet is reporting today.

Yet, there are 130.95M Tesla shares outstanding, according to the most recently available numbers. An extra 532,000 shares is a drop in the financial bucket in comparison. To be precise, it equals 0.4 percent of the total outstanding stock volume. This isn’t a massive increase in ownership.

Also, if those 532,000 shares are 0.4 percent of the total outstanding stock, and 22 percent (Musk’s current holding) minus 0.4 percent (what Musk just bought) equals 21.6 percent (what Musk owned before the purchase) … why is AutoBlog reporting Musk now owns 1/5th of Tesla? Musk already owned 1/5th — erm, 21.6 percent — of Tesla Motors.

But hey, it sure makes for a great headline on a slow Saturday.

[Note: To be fair to AutoBlog, the “one-fifth” myth started at TechCrunch.]

#22Percent #ElonMusk #Math #OneFifth #Shares #StockOption

Mark Stevenson

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8 of 85 comments

El scotto on Jan 31, 2016

Tesla sells expensive cars to guys whose wives go to Pilates/yoga class and then do lunch. Cool cars? Yes. Cheaper plug-in electric cars are available from other companies. The Holy Grail of electric vehicles will be fleet sales. US Post Office, some UPS trucks, and any small business owner whose trucks drive less than 150 miles a day.

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- Tnk479 on Feb 01, 2016
  
  I once read a very convincing article that argued that due to miles driven per year and other characteristics, hybridizing commercial heavy trucks would yield far more bank for the taxpayer buck in CO2 and emissions than electrifying luxury cars.
  
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Tnk479 on Feb 01, 2016

It will be interesting to see how consumers react to being offered far more PHEV models in the next few years. The German manufacturers seem particularly committed to offering PHEV across their entire lineup. Toyota proved the viability and reliability of hybrids long ago and are selling their 5th generation hybrid powertrain now. For anyone paying close enough attention, PHEV gets 80% of the emissions benefits of BEV's with none of the range anxiety and limitation drawbacks. And as many have noted, for people in colder weather climates PHEV is the better architecture. Tesla could ultimately be astonished to learn that their planned Model 3 product is not nearly as compelling outside of Miami and the left coast as say a PHEV BMW 330e.

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- HotPotato on Feb 02, 2016
  
  PHEVs are a great bridge technology, but they're just dragging along the dead weight of the ICE, gas tank etc 80-90% of the time. Affordable 200 mile BEVs are here next year, and generic DC fast charging is spreading. Honestly, rather than a PHEV, I'd like to have a 200 mile EV with DC fast charging, and rent an ICE car for the trips---a fraction of 1%---when I'm driving long-distance more than 100 miles from a major highway corridor.
  
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- Tnk479 on Feb 02, 2016
  
  @HotPotato You must live in a temperate climate. BEV's are not as great in cold weather climates -- oh sure, they can be used but range of BEV's is much more sensitive to temperature and road conditions as compared with ICE. Something that eliminates range anxiety and heats the vehicle and battery is hardly "dead weight" -- I would say the two are rather elegant in how they complement each other.
  
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- Mcs on Feb 02, 2016
  
  @tnk479 You're making comments about something you have no actual experience with. Like most armchair experts, you've got it wrong. Get some actual experience with an EV. I put 20+k miles on one per year in a cold climate and I don't have any issues with the car. One issue PHEVs have is that you still have the ICE maintenance issues like oil changes, exhaust maintenance, and other hassles you don't have to deal with when you own an EV. One goal for me was to eliminate those issues. I live in New England. I've made 50 mile non-stop trips in sub-zero Fahrenheit weather without a problem. Preheating and having a car equipped with a heat pump helps. But, I'm not always making 100-mile trips and most days I barely make a dent in the car's charge level. Ironically, one day when the temps dropped to -4, two co-workers with ICE cars were late due to failed batteries.
  
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- Tnk479 on Feb 04, 2016
  
  @mcs I of course never said or implied that a BEV is unable to make 50-mile trips in sub-zero temperatures. https://yourlogicalfallacyis.com/strawman I said that BEV's are "not as great in cold weather climates". While vague, the basis for that is a Tesla drivers study on the matter: http://www.teslarati.com/tesla-battery-range-sub-zero-snowy-conditions/#wTGt5G53WsO2YTm1.99 The Tesla offers by far the best cold weather performance by the way. Other BEV's perform even worse. ICE vehicles are also less efficient in the Winter but they don't lose as much range as BEV's. YMMV quite literally but it's no coincidence that BEV sales are highly concentrated based on two factors: subsidies and warm climate.
  
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- Mcs on Feb 04, 2016
  
  @tnk479 50 miles is beyond what most drivers commute. If a BEV is useable for a long drive like that, does it really matter that it's less efficient in the cold? It's still doing its job. Battery technology is changing and Nissan, for example, has been making changes to their batteries and quietly putting the changes into production. In fact, Leafs produced after late January 2014 have very different batteries than before that date. So, when you say Tesla has the best, you might be using stale or inaccurate data. That link you posted states a 40% loss for Tesla, but I've never seen even a single drop with Nissan's current batteries that high - although it was really close on the -4F degree day. Then again, there are so many factors that effect range in cold temps. I usually run in B mode I usually go from heated garage to heated garage. That means I pre-heat the car and the battery, so I'm rolling out of the door in a rolling sauna with a toasty warm battery. Coldest temps are early in the morning, so to stay awake I like to use seat and steering wheel heat to keep my body warm and my face cool and that has an impact. EVs sell very well in Scandinavia and we have plenty here in New England, so I'm not the only person that doesn't find cold weather performance an issue. As far as subsidies go, I'd like to see what ICE vehicles would cost without Federal bailouts, factory subsidies, and what fuel costs would be without government payouts to the oil industry. Whatever their flaws, the driving and ownership experience with electrics is far superior than ICE. That's what ultimately will sell them. I really doubt Model S or Model X sales are driven in the least bit by subsidies. It's not a lot of money at that income range. What is a factor is that wonderful smooth quiet motor and drivetrain. It's so sweet. I'm an auto enthusiast and I admit I'll put up with minor flaws to get a superior driving experience. Charging issues, range, cold, heat, whatever - just give me that drivetrain and low center of gravity. I can't get enough of it.
  
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