NEW YORK • Tesla chief executive Elon Musk wants to take the company private. Well, good riddance, and do not let the garage door hit the bumper on the way out.
As innovative and disruptive as the maker of electric cars has been over the past decade or so, it does not belong on publicly traded markets. For starters, it has lost money every year since 2006.
That is understandable for a growing business in a capital-intensive industry. But that is what venture capital is for.
Granted, Mr Musk is adamant the company will make money in the second half of this year - and more than enough to avoid having to raise more capital, despite a dwindling cash pile. He will have to deliver with leveraged lenders looking over his shoulder.
It would be ironic if Tesla drives off the stock exchange just as it becomes profitable. But under Mr Musk, the company has routinely reneged on promises and targets.
The latest was in last week's earnings call, when he appeared to dial back expectations of sustainably producing 7,000 vehicles a week.
On top of that, Tesla engages in execrable corporate governance. The board is packed with Mr Musk's allies. One is his brother Kimbal, a chef. Lead independent director Antonio Gracias runs a private equity fund Mr Musk has backed, and was a director at another of Mr Musk's firms, SolarCity, before Tesla bought it in 2016 - a deal that raised governance concerns of its own. Both also sit on the board of a third Musk venture, SpaceX, in which Tesla director Ira Ehrenpreis has invested.
Mr Steve Jurvetson is a director there, too, though he is suspended from both boards after his own venture capital firm DFJ ousted him last November during a personal misconduct probe. And Mr Brad Buss spent seven years as SolarCity's finance chief. That leaves just three directors with no other obvious ties to Mr Musk. It took almost a day for the board to publicly acknowledge Mr Musk's tweets about wanting to take Tesla private.
And even then, its members said little of substance. They have yet to even set up an independent committee in preparation for discussions. That fits their track record.
They stayed silent, for example, when Mr Musk took to Twitter to brand as a "pedo" one of the rescuers of the Thai football team trapped in a cave recently. Such outbursts on social media and investor calls make Mr Musk a liability, and Tesla hard to value. The public market is better off without it.
REUTERS
