An Open Letter To The Pension Funds Holding Tesla Shares

The party is over, move on.

A group of pension funds, led by the American Association of Teachers has sent a letter to Tesla urging the board to have the CEO put in a 40-hour work week at the company.

The CEO is Elon Musk, the man responsible for the current state of affairs at the company, the declining sales, the disappearing profit margins and the destruction of the brand.

Musk is the man who delayed and increased the cost of Tesla’s first product, the Roadster by insisting, based on nothing but a whim, that the car have carbon fibre doors. For a glimpse of the real Elon Musk, I recommend you read Ed Niedermyer’s excellent book “Ludicrous, The Unvarnished Story of Tesla Motors”.

He is the man whose attempts to over-automate the Model 3 production line failed and had to be ripped out while a second line had to be set up in a tent to meet production targets.

He is the man who promised “full self-driving” a decade ago and then handicapped Tesla’s efforts when he eliminated Lidar after a falling out with the suppliers and later eliminated radar leading to a massive increase in complaints about phantom braking.

He is the man who led the company in the design of the abominably awful Cybertruck, thousands of which sit rotting, unsold in parking lots because nobody will buy them.

He is the man who is fighting in court for a self-awarded bonus equal in value to three times more than the company has made in profits during its entire existence.

He is the man who decided to build a car factory in the most expensive country in Europe. That factory now operates at about 30% of capacity.

He is the man who destroyed the Tesla brand by aligning himself with extreme right-wing fascists and giving a fascist salute to his followers at the inauguration of the US President last January.

He is a man so wrapped up in his own self-importance that he believes he is doing the human race a favour by spreading his loathsome sperm among paid surrogate women.

He bought his way into government, where his attempts at cutting waste have been a colossal failure.

He is also a drug addict. A video, made in the office of the President of the United States of America during a press conference shows him zonked out of his mind. The video doesn’t show a recreational user getting high at a party, it shows a full-blown addict whose drug use is out of control.

Elon Musk working 40 hours a week cannot save Tesla.

Tesla shares are trading at a P/E ratio of 195, compared to a P/E of 7 for its peers in the automotive industry. Its revenue has been static for the past two years, profit margins are among the worst in the industry and have been falling precipitously as the company tries to sell outdated products in a highly competitive market. Its attempt at producing a truck for the American market has failed dismally. There is no viable product on the horizon that can revive Tesla’s fortunes, the brand has been destroyed by Elon Musk’s antics.

Later this month, under Musk’s direction Tesla will fake a robotaxi launch, just as they faked the battery swap demonstration and faked the Optimus robot by having hidden teleoperators. Those operators will assist the cars as they drive through a limited area of pre-mapped streets as a fawning goggle-eyed media looks on. This is Tesla’s hope for the future as its auto business declines, but there is no evidence that Musk can ever make self-driving function to the point where it can safely be used as a taxi, and no evidence that it can be a viable business. It is more likely to be a serious cash drain.

You have been very fortunate to have invested in a stock that has reached bubble valuations. It is a stock whose price has been driven by outlandish claims for a future that never happens, egged on by a cult and manipulated by incessant option trading. It is a meme stock.

It is a stock that does not belong in a pension fund. You, as a group of pension fund managers, owe a fiduciary duty to your constituents, the pensioners who rely on your investment decisions to provide their future income.

Instead of writing letters to Tesla’s incompetent and sycophantic board, a better approach is to sell the Tesla shares in your portfolio. The party is over, take your profits and move on.