When a company decides to avail itself of the public securities markets, the private “controlling shareholder(s) can do whatever they like” mantra comes to an end (as to the minority shareholders, for certain).
And. . . when one person (or tightly-affiliated small group) effectively controls all decisions at TWO (or more) public companies, the potential conflicts — for time, attention, talent and financial resources… can become overwhelming.
True enough, this particular controlling shareholder has vast wealth… so some of the concern is mitigated, if he is willing to risk his last dollar, for both companies (if need be)… but it still remains true that each set of shareholders (into the trillions, in market caps) will now expect the full measure of his devotion — to their respective businesses (separately).
And — that is simply not physically possible. He is (wrongly, I personally think) considered by many of these largely-duped shareholders as some sort of engineering Houdini — a guy who can make silken threads — from a sow’s ear. There are only 24 hours in a day, and time he spends on one business will inexorably be at the expense of the others. That is simply physics — there is no multi-verse.
The most common legal solution, in these situations (with prior ’34 Act companies) has been to merge the companies, and have only one public company parent deciding everything for all the subsidiaries. In this way, the shareholder(s) get the benefit (and risks) of all the far-flung “businesses” he claims to be creating.
[And all of that is before we start talking about the untruths he told lenders about the prospects of Twitter, now called X-itter — to the tune of about $30 billion.] No, my strong hunch (based on experiences in similar but smaller situations) is that within a year or so, the Tesla and SpaceX public companies will be folded together, so that all shareholders own the same pieces of his various pies.
If he doesn’t do that, eventually some of the people with now billions at stake in SpaceX will sue — if/when the stock price falls off of these vaporous valuations. They will allege that he is preferring to spend time on present day electric cars and trucks, rather than plans for distant futures, a la the mining of asteroids. They will be… right.
So it goes. And, in the end, he will no longer be a trillionaire, no matter what he does from this moment forward. Count on that — within two years. Onward.
नमस्ते
Powerline Lies... 