Tesla: #260 on Fortune 500, #1 for Entertainment

Tesla: #260 on Fortune 500, #1 for Entertainment

Yesterday we looked at the 2018 list of Fortune 500 companies and decided that today we would focus in on the one that took the greatest leap forward, since it’s also the most entertaining company on the list.

We’re talking about Tesla, which advanced 123 spots to #260.

We could write about CEO Elon Musk’s statements about how he’s going to merge the human brain and artificial intelligence, and colonize Mars. We could mention that Mr. Musk and his family have made billions, even while Tesla remains unprofitable. Or we could write about the questionable environmental benefits of Tesla’s electric cars.

But we’ve covered all of that in a previous post. And so much more has happened since then.

Earlier this month, CEO Elon Musk announced plans to take Tesla private. Then he said he had a proposal to take the company private at $420 a share. Within days, two class-action lawsuits were filed alleging that Tesla and Musk “embarked on a scheme and course of conduct to artificially manipulate the price of Tesla stock to completely decimate the Company’s short-sellers.”

Meanwhile, Tesla and Musk are being investigated by the Securities and Exchange Commission, which is curious about why Musk used a tweet to disclose plans to take Tesla private. The SEC has subpoenaed each of Tesla’s directors. The SEC is also investigating Tesla’s Model 3 production disclosures.

Musk then revealed that the Saudi Arabian Public Investment Fund, a sovereign wealth fund, is interested in increasing its stake in the company, which is currently close to 5%. While Saudi Arabia has been seeking to diversify and become less dependent on wealth generated by oil, investing in a company that could cause oil consumption to drop seems counterintuitive.

And then there was his New York Times interview published on Friday, in which he claimed that his 120 hour work week was taking a toll on his health (NOTE: 120 hours is the equivalent of working 24 hours a day Monday through Friday, then taking the weekend off).

Still Unprofitable, Stock Up 2,000%

Earlier this summer, many analysts were bullish on the company, suggesting that it is about to turn a profit. Others remain skeptical, as company finances are being questioned; Tesla asked some suppliers to help the company become profitable by refunding a portion of payments made since 2016.

Fortune reported that Tesla’s rise in the Fortune 500 is due to “booming sales” of its Model S sedan and Model X SUV, while also noting that the delayed rollout of Tesla’s mass-market Model 3 caused its stock to drop 12% in the first four months of 2018.

Shareholders can’t complain too much, though. As CNBC reported, “Despite a nearly 2,000% increase in share prices, the company has still not turned a profit.”

In spite of being unprofitable, last year Tesla had the highest market cap of any American auto company, which we suggested “is a result of America’s love affair with all things considered to be green, media hype, Hollywood hype and Elon Musk hype.”

The “green,” appears to be mostly going to Musk and his family.

“Elon Musk boosted his net worth by $1.4 billion with just one short tweet,” Business Insider reported. “Elon Musk became $1.4 billion richer on Tuesday as Tesla’s stock surged after he tweeted that he was thinking of taking the company private. With a $25.8 billion net worth, he’s the world’s 31st richest person.”

Tesla’s stock, which is the most shorted stock in the U.S. stock market, has been up and down since then.

While we’ve focused on Tesla and its electric car business, we should note that Tesla became the country’s largest installer of solar panels with its 2016 purchase of Solar City. Meanwhile, Musk is also a 54% owner of SpaceX, which Forbes reported “has done well to dominate the space launch services sector – offering to launch commercial (and occasionally military) satellites at a much lower price than incumbents while largely remaining profitable.”

SpaceX is on Fortune’s list of the 25 most important private companies.

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