Morningstar

What Would Tesla Be Without Musk?

We think it would be harmful to investors for the SEC to ban Musk from running a public company.

Securities In This Article
Tesla Inc
(TSLA)

Musk reiterated on Aug. 24 that he believes he has more than sufficient funding to take Tesla private, but this initial claim in an Aug. 7 tweet is reportedly under investigation by the Securities and Exchange Commission via subpoenas to board members. Given Musk said he had a July 31 meeting with the Saudi Arabian sovereign wealth fund, we think it may be difficult for the SEC to say the Aug. 7 "funding secured" tweet was untruthful and purely designed to hurt the short sellers that Musk despises. We also think at this time that it would be harmful to investors for the SEC to ban Musk from running a public company. We think for now Musk is effectively Tesla and without him Tesla is just a capital-intensive automaker burning cash with too much debt due soon. Musk revealed in a recent New York Times interview that the company has searched for a COO in the past to take some pressure off him. We think that is a good idea but we think it will be hard to find someone willing to take the job.

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About the Author

David Whiston, CFA, CPA, CFE

Strategist
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David Whiston, CFA, CPA, CFE, is a strategist, AM Industrials, for Morningstar*. He covers stocks in the automotive industry, including dealerships, parts manufacturers, and automakers. He has covered the automotive industry since joining Morningstar in 2007. He writes stock reports, ad hoc reports, stock analyst notes, and builds discounted cash flow models for each company covered. He also assesses their economic moat and makes frequent television and print media appearances in local, national, and international news outlets. Key stocks covered include GM, Ford, CarMax, and all six publicly traded franchise auto dealers, such as AutoNation and Penske Automotive Group.

Before joining Morningstar in 2007, Whiston spent four years in PricewaterhouseCoopers’ New York real estate audit practice and one year in its Chicago office working on real estate acquisition due diligence, gaining experience around assessing an asset’s cash flow.

Whiston holds a bachelor’s degree in business administration with a concentration in accounting from the University of Richmond’s Robins School of Business. He also holds a master’s degree in business administration with concentrations in finance, economics, and organizational behavior from the University of Chicago Booth School of Business. He holds the Chartered Financial Analyst® designation, and he is a Certified Public Accountant and a Certified Fraud Examiner.

In 2012, he ranked first in the specialty retailers and services industry in The Wall Street Journal’s annual “Best on the Street” analysts survey. He ranked first in the same industry in 2011 .

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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