Thoughts for the Day, January 3, 2025: $150 million was a small price to pay.
Elon Musk/Tesla
Since Musk decided to get heavily involved in supporting Trump’s presidential run, I have wondered what was Musk’s motivation? I finally had some time to do a little research, and this is what I found.
Tesla is facing multiple investigations by the federal government. Some of these are criminal investigations and some are civil investigations. Here are some of the areas of investigations.
· Per the New York Post, the federal government is investigating Tesla’s “Full Self-Driving” software after several crashes that were blamed on the system, including one that led to a fatality. The US auto safety regulator said it was opening the preliminary evaluation after four reports of crashes where FSD was engaged during reduced roadway visibility like sun glare, fog, or airborne dust. In one crash, “the Tesla vehicle fatally struck a pedestrian. One additional crash in these conditions involved a reported injury,” NHTSA said.
· Per PBS, the U.S. Department of Justice (DOJ) is also examining Tesla's representations about its self-driving capabilities, investigating potential securities or wire fraud related to the marketing of Autopilot and FSD features. As of now, this investigation is ongoing, and no charges or settlements have been publicly disclosed.
· Per Reuters, Tesla has faced environmental compliance issues. In February 2024, the company settled with California authorities over hazardous waste violations, agreeing to pay $1.5 million and implement corrective measures. This settlement addressed violations at Tesla's Fremont factory and required the company to enhance its waste management practices.
It is natural that an innovative company such as Tesla will have issues with federal regulations. All the automakers have had issues over the years. However, none of the other automakers have an owner such as Musk.
It is estimated that Musk owns 715 million shares of Tesla Stock, which as of today is valued at $410 per share. Thus, Musk’s market value in Tesla is $296 Billion. A $1 drop in Tesla Stock costs Tesla $715 million.
When a federal investigation is announced against a company, it is not unusual for the stock to drop 5-10%. A 5% drop in Tesla would cost Musk nearly $15 Billion.
Trump will have control over all the federal agencies starting January 20, 2025. Musk will make sure Trump will appoint someone who is friendly to Musk and Tesla.
$150 Million was a small price for Musk to pay for the control that he needs to protect Tesla from governmental interference.
See my Video of the Day
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Grand Bargain
I recently read the book “Grand Bargain” by Judge Gerald Rosen who was the Detroit Bankruptcy Chief Mediator. It was a book I couldn’t put down. Although I read nearly every article written about Detroit’s bankruptcy by the Detroit News, Detroit Free Press and other newspapers, Judge Rosen takes the reader to places that very few had privilege of knowing. In sixteen months, his leadership accomplished what most experts did not believe was possible.
In sixteen months, Detroit was able to exit bankruptcy with a plan that saved the pensions of Detroit’s employees, saved the world class art collection of the Detroit Institute of Art, and created a masterplan that allowed Detroit to move forward with a plan the Mayor Mike Duggan has been able to implement.
The book the Grand Bargain gets my Orchid of the Day.
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Quote of the Day: “If it is not right, don't do it. If it is not true, don't say it.” Marcus Aurelius, a wise man.
Orchid of the Day: “Grand Bargain” by Judge Gerald Rosen, the Detroit Bankruptcy Chief Mediator. A fascinating story of ingenuity, resiliency, perseverance, flexibility, cooperation, compromise, and hard work.
Onion of the Day: We the People. There is no question who will be calling the shots in the next four years. As usual, it is always about the money.
Lyrics of the Day: “Coast to coast shows, he’s known as the globetrotter. Lonely roads, God only knows, he’s grown farther from home, he’s no father. He goes home and barely knows his own daughter. But hold your nose ’cause here goes the cold water. His hoes don’t want him no mo, He’s cold product. They moved on to the next schmo who flows. He nose dove and sold nada. So the soap opera is told and unfolds, I suppose it’s old partna, but the beat goes on, Da da dumb da dumb da da.”
If you think you know either the song or the artist, send me your guess in the comments below.
Answer to yesterday’s Lyrics of the Day. Smoke on the Water by Deep Purple. Three subscribers had the right answer.
Question of the Day: It’s always about the money. Was there any doubt?
Video of the Day: Tesla Full-Self Driving Mode Faces Federal Investigation
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