That he can take tough/unpopular calls and do what is asked or need be done. Just like being popular among techies is good thing in some circles. Being unpopular can be good in other places.
Pretty laughable, considering Parag as CTO presided over the slowest product velocity at pretty much any major tech company. The product is almost unchanged, except additional censorship, since he started as CTO in October 2017.
With that track record, one must assume his head will be one of the first on the chopping block.
I don't see slow change as a net negative. It's not necessarily positive, either, but not trying to fix things that work perfectly well is a good mantra (looking at you, Google).
Also, he was recently promoted to CEO, which would be strange if the common opinion at Twitter was that he failed as a CTO.
In the enterprise, if someone high ranking is going to be replaced, they're never fired unless there was company-hostile bad behavior.
If the organization is trying to move in another direction, they reorganize and reduce the role of that high ranking leader- maybe to a position where they're alone! and give that high ranking person time to make their next move comfortably.
> In the enterprise, if someone high ranking is going to be replaced, they're never fired unless there was company-hostile bad behavior.
What? Perhaps in shitty companies that are incapable of making tough decisions, but this is definitely not my experience.
On the contrary, for most cases I don't think there is much "shame" for being fired as a senior exec because a lot of times it's just that there are disagreements among senior leadership about where to take the company, and so it's better to have people leave who aren't on board with the company direction than to have those disagreements fester.
You're thinking firing for cause. These two were probably told that they would no longer run their divisions, here's a nice severance package if you want to leave. What are they gonna do, stick around in a lower role?
Firing for someone for taking leave is definitely illegal.
Firing them for unrelated reasons while on leave is not.
This is true even in very progressive places like california.
Fairly specific anti-American jibe gets translated into "you hate America".
Seems you could do with a little more George Carlin in your system.
He fucking loved America....apart from the shitty bits that the rest of the world agrees with him about.
It's so lazy to hate America with a jab that is literally not true. If I get fired for going on paternity leave, I'm suing my company, and I will win - even in cRaZy America.
Firing while on paternity leave isn't really that bad as long as they give you severance to cover paternity leave plus some extra - which I'm guessing they did since severance packages for higher ups tend to be pretty good. (As compared to no severance or two weeks that many ICs get)
I strongly disagree. Firing someone while they’re on leave sends a direct signal to anyone else considering taking leave: “watch out, you won’t be able to defend yourself if you aren’t here.”
ICs follow the lead that executives set. A chilling effect like this will cause folks who most _need_ the leave — single parents, people with family in need of care, or those struggling with their own health issues — to second-guess their choice, while those who can just walk away w/o any real risk can go ahead and try taking time away.
It also puts the lie to the idea that employer-subsidized leave beyond the federally-protected time window is an entitlement rather than an easily-canceled perk. We all know that rationally, but a BigCo obviously exploiting that trust is a good reminder that the company (any company) is not there to help you, they are not your family, and you have to be ready for this kind of “switcharoo” whenever the numbers (or politics) justify it.
If you are being fired, you generally do not "defend" yourself. Also, people at this level are very well-compensated, and the comp generally prices in the risk of things like this. Whether you are on leave or not scarcely matters unless you can show that you are fired because you are a parent (and that's an employment law issue).
It is my experience that people taking time off to be parents also take time off from the machinations that will lead getting promoted (at certain levels), thus hampering their advancement, but they are usually not fired, in tech anyway. Now the treatment of women, who already get a pretty bad deal even if they aren't mothers, is another matter altogether...
Totally disagree, primarily because Twitter offers nearly 5 months of paternity leave. I don't know when the Twitter's Head of Product originally left for paternity leave, but if it was a couple months ago, obviously the world has changed under Twitter's feet in that time.
A business can't just stop because someone is on leave. I would expect them to be treated fairly, and the same as if they were not on leave when it comes to personnel decisions. What would not be fair, to both the employee and all of their colleagues, is to say that when someone goes on leave that there is a moratorium on any changes to their status for 5 months.
The ENTIRE point of parental leave benefit is to ensure that your employment status doesn’t change while you are using it. The business doesn’t have to stop in it’s tracks, but the legal expectation is generally that you will come back to the same job you left.
So if the company has widespread layoffs (not saying that's what happened in this case), then anyone on paternal/maternal leave is automatically immune?
> This sends a horrifying message to employees.
Yeah, as someone without kids, your proposal certainly sends a horrifying message to me.
It’s not a proposal. It’s how the law works. If there are layoffs, then yes you can lose your job on parental leave, technically as long as the elimination of your position is unrelated to taking leave. I’m not saying that there is no way to do it. I’m saying that it’s a dumb thing to do.
The message should be just as horrifying whether or not you have kids. The message is: “We made a commitment about your terms of employment. We are willing to break that promise openly and publicly with one of our leaders. Do you think we won’t do it to you?”
Anyone at twitter right now should see this as a red flag at a time when everything is in flux.
Management is in chaos in the middle of a politically contentious buyout, and doing things like firing people on parental leave that will necessarily read badly in the press.
If I were at twitter right now I would be getting everything in writing, and lining up a new job that starts the day my RSUs go liquid.
You have very odd ideas about what this "commitment about your terms of employment" is.
Yes, its true, legally you can not, and should not, be penalized for taking parental leave (a point I made in my original post). At the same time, you should not get some guarantee that because you are on leave you can't be treated the same as if you were working.
If this guy would have been fired had he been working, a parental leave doesn't act like some sort of "get out of jail free" card.
From looking at his tweets, he left just over a month ago. So if he had four months left in his leave, it would have been absolutely unreasonable to wait that long.
He's very high up. He's not going to be suffering like the serfs below him. I've seen many let go with no severance or two weeks in a worse recession - including those who don't have a 8+ figure NW...
I mean, he apparently sold $1.5M worth of Twitter stock last week, and is estimated to hold (based on some super basic internet research) ~500k more shares, which is ~$25M in stock[0].
I think he'll be able to weather the financial impact of a recession and having a kid.
[0] Note that this is Twitter only, and wouldn't include any other form of diversified holdings.
This my feeling as well. Maybe I’m thinking too logically about all this:
A) spend paternity leave enjoying your newborn, but in the second half gearing up and remotivating to go back to work, getting back to work and being let go with a “we didn’t want to dismiss you while you were gone, thanks for coming back, here’s the door”
vs
B) you’re on paternity leave and the company lets you go, but still your leave is fulfilled (I.e you get the payout and time off). Now, instead of investing energy on the return to work, you can just move on with a “best to quit while your having fun” attitude.
I fully support paternal leave. As a father of four who despairs at a fatherless world around me, anything we can do to strengthen fathers (and equally mothers) is a great thing.
But there is a sad reality to extended leaves as well. We hire people with 6 month probationary periods, but rarely are people filtered by this. But I have been in meetings where a person on extended leave (medical, parental, whatever) and it becomes group apparent that the individual hasn’t been missed for a variety of reasons, and the consensus emerges that this “individual not being here” is actually a net win for the company and its aspirations. Do we know that that’s not what happened in this case?
I feel like you’re missing the part where I said I was father of four. I failed to mention I recently helped my oldest with newborn twins (if you’re thinking 2 is twice is hard as one, you’re wrong, it’s more like 4x).
I’ve accrued some experience with newborns. It’s a very tired time at times. It’s a time of wonderment. Especially with your first, it’s surreal, after 2 weeks you can barely remember “what was life like before this again?” But despite its otherworldliness, it’s also a lot of downtime. It’s different than normal downtime, because you’re tied to this growing little life, but it’s there. And I did indicate that it is in the latter half where having this project to work on would be ideal. Guess that’s just me and apologies if that seems insensitive. It worked for me.
The only positive change I can remember in the last 5 or so years (besides maybe extending the character count which I'm neutral about) is the toggle to go back to chronological tweets. You used to have to use lists of Tweetdeck, then they added an option but was hidden away or didn't stay default.
For all the hype AI/recommendations algorithms get I don't think it works well on a platform where you already choose who to follow.
Otherwise I've always wondered what the thousand Twitter employees do besides keeping the site running and advertising sales/development. Although I've never worked at a giant tech company before.
Presumably he presided over the only new features added to Twitter, which is more censorship and "adding context" to tweets that have a certain political slant. In any case, it's clear he did almost nothing.
Yes. It was once somewhat pleasant to use and less algo reliant, and now it is very unpleasant to use and reading a tweet's thread has become difficult.
"Fired while on paternity leave" hurts a hell of a lot less when you're a mega millionaire who will be able to walk into a leadership position anywhere he likes, but it still sucks.
My point is there's never a "good time" to get fired from a job you don't want to leave. GP doesn't like that this guy was fired on parental leave. OK so fire him on his first day back? There's never a time that won't "suck."
When you have enough money to stop working and still be able to comfortably feed and shelter the next few branches of your family tree I'd say it doesn't suck so bad
Does it really suck? His leave is getting paid and he's getting severance, which is essentially more paid leave. He can spend more time with his child. He might actually find it preferable. Having recently went on paternity leave myself, I would love to have more paid time with my child.
The sheer amount of equity, cash and packaging going into Kayvon's severance is going to be princely. Additionally, he's a founder of periscopeco, so he's not without direction.
Why would firing someone who's on paternity leave be an issue at all? We're talking multi-millionaires who will get multi-million dollar severance.
It's pretty hilarious to see the pearl clutching of techno-bourgeoisie over something like this, pretending other tech-lords are getting mistreated over some supposed breach of decorum. The mere fact that he gets to take parental leave puts him head and shoulders above most workers in the country.
Parental leave, high salary, severance... where do I sign up for some of this "truly awful" treatment?
Assuming that being fired while on paternity leave is even notable as a tragedy is a very 2022 thing.
People can disagree on whether paternity leave is a good, bad, or indifferent thing, but it didn't even exist as a concept for most of humanity's existence in an official capacity. It went from being an idea, to a right, to something roughly comparable to "fired while undergoing chemotherapy" in a generation. It's odd.
There's a very weird strain of culty utopian-maximalism in our culture right now. It'd bother me less if the entire last century wasn't filled with horror stories about what can happen if this sort of childishness festers too much.
I assume it's yet another consequence of social media's effect on culture: being as hysterical as possible has suddenly become heavily rewarded. The downstream effects on broader political culture (and culture in general) are utterly fascinating to me.
HN: "Firing a millionaire on paternity leave—and by "firing" I mean continuing to pay for the rest of their leave, plus probably a bunch of severance—is horrible!"
99% of the rest of the US: "WTF is paternity leave? Is that when your boss generously lets you use some of your annual leave for part of the week in which your kid is born?"
Many states in the US have family leave (including paternity leave). California is more than 10% of the US population and the rules for paternity leave are extremely broad:
- Welcomed a new child into the family in the past 12 months through birth.
- Paid into State Disability Insurance (noted as "CASDI" on most paystubs) in the past 5 to 18 months.
- Not taken the maximum eight weeks of PFL in the past 12 months
Insinuating that 99% of the US lacks paternity leave is disingenuous.
Nice, didn't know about that. Expanded-qualification FMLA-like unpaid leave and more limited provisions for paid leave, for some workers, is pretty good compared to most of the country.
I think the issue is more that firing someone during paternity leave discourages others at your company from taking paternity leave, not that this person is in some way financially devastated from the firing.
It's only through birth? I didn't know that and would have expected CA to do better. E.g. adopting a young child or baby. And does surrogacy count as birth?
Lack of empathy between wage workers, pitted against other wage workers, perpetuates this.
These are people that get taxed at 55% (top california income + top federal income + additional taxes). Not the ones with multiple orders of magnitude more money that get taxed at 4%.
Their boat is so similar that its embarrassing for you to fall for the division.
> Their boat is so similar that its embarrassing for you to fall for the division.
Sticks, stones. I'm rubber, you're glue. Et c.
I'm well aware of the problem of false divisions distracting from the very real and much more important class war, but the level of concern on this one's still kinda silly, considering the broader context. Besides, I'm with the faction that'd rather get this news during paternal leave, than on the first week, or even month, back. Provided any pay for the leave—assuming at least some portion of it was paid—continued, anyway, which I expect it will unless they really want to risk a lawsuit for little benefit.
> These are people that get taxed at 55% (top california income + top federal income + additional taxes).
Since income taxes are graduated, there is literally no one that pays 55%. Instead, you just approach that rate as your income rises (and never reach it since your front income is taxed at lower rates).
I don't see the issue either. In a fancy job like this it seems much better to get fired now so he can calmly plan his next move, instead of them waiting for him to return and then firing him, which would just waste everyone's time.
Part of the deal with being an executive is no job security. It's part of the trade you make for gigantic compensation. I never really feel bad for executives who are fired, even for unfair reasons -- it's just part of what they sign up for.
>Part of the deal with being an executive is no job security.
I would say that in the US labor market having no job security is the norm rather than the exception, so it seems peculiar to couch it as "part of the trade you make for gigantic compensation".
That there is high compensation attached to this job is unrelated to the principal of firing an employee on family leave.
Companies are having to hold the line on what we value in this country, as legislation from environmental to health is not keeping up.
Twitter is specifically of note because the CEO recently had a child and rightfully took paid leave himself.
Whatever your personal opinions are on Elon Musk, he is very influential.
The man has six children and a varying track record on how he has communicated his views and personal use of parental leave and the role of the father following the birth of a child.
I thought they paid him something in the 10's of millions range to bring him on through periscope?
I thought the comp packages were more in the single digit millions range for these folks, and stock oriented. My guess is they've taken bigger losses on just the general stock market decline than most, though for those who hold twitter I personally think Elon is wildly overpaying (as usual, see solar city) and they will make out like bandits as a result there.
If parental leave should legally be counted as "working" (which it is, in many jurisdictions), with pay increase, bonus and promotions being based on virtual work, then why shouldn't firing be just fine too?
Obviously not fire in any way related to parental leave, but if it's to be counted as work then it should be consistent.
100% agree. I think it's bizarre that folks think there is some kind of moratorium on getting laid off or fired if you're on leave, especially since Twitter offers 5 months of paternity leave. So everyone that is not on leave is at risk, but everyone that's on leave is magically protected?
You can't, and shouldn't, be fired for taking leave, bit obviously there are a million and 1 reasons for there to be changes in Twitter's exec leadership given what's happened over the past month.
Top management taking Paternity leave, and returning to work as though nothing changed after a few weeks is nothing short of great privilege.
I've seen normal employees take such leave, only return to find others have taken over their work, and by all means they are no longer needed and they have start working their way into the team all over again.
Paternity leave is more or less a kind of paid short term temporary severance already. Sometimes the company does make it permanent.
If you are gone for weeks/months and no one feels any difference, then sometimes its an indication you were never needed at the first place.
Feels less condescending than Apple "Geniuses" or Best Buy "Nerds", and pretty in line with "Googlers", "Toasters" or "Hulugans".
Is this a thing most people refer to other employees as most of the time? No, but it helps corporate create an image of a fun, playful workplace. I think it's utter bullshit, but you know, to each their own.
> No, but it helps corporate create an image of a fun, playful workplace
Nah, all of these corporate 'pet names' are applied unilaterally, by the executives to the workers. Condescension is the point. The application of such a nickname is a show of power, meant to remind workers of their place in the system.
I don't disagree with you, hence the sentence immediately following that. That said, tons of middle managers seem to buy into the BS more than the people above or below them, and seem to proudly think of themselves as stupid nickname that is applicable.
If your culture involves calling me anything other than an "employee", I'm not a fan. Personally, I will always think of myself as a "Mercenary" regardless of who's signing my checks currently.
It all sounds like too much Kool-aid has been drunk by the employees. That's the creepy thing about it to me. Another example of where the employees wear company branded clothing. I've worked for a place where the company sold their branded items to employees and the employees would purchase each and every new version that was offered. I swear I could hear them chanting "one of us".
Twitter's consumer product team is truly awful and have just made the product more and more miserable to use, so I don't cry too much about the change in leadership.
Having said that, firing someone on paternity leave is terrible and would be rightly illegal in many countries.
Firing someone for being on paternity leave is definitely illegal in most places, but laying off executives and high level business folks before a transition at the top isn't illegal. I wonder if being on paternity leave is a "get out of layoffs free" card where you simply cannot be laid off with others while you're out.
My wife was on maternity leave when Covid layoffs happened at her company. She didn’t get laid off. But at the time we both looked at each other and wondered “did we just get saved by maternity leave?”
She is great at her job so we have no reason to think she would have otherwise been laid off. But plenty of people who were great at their jobs got laid off due to Covid. So it’s hard not to wonder.
Twitter is an engineering for the sake of it company.
Pair that with their actual consumer product being a chaotic scattergun of failed sub-projects, terrible client UI relaunches and the apparent inability to ship anything meaningful given years of time and resources and frankly if I was a large enough investor I'd have been wanting wholesale firings and reorganisation years ago.
The problem is, if they decided they wanted to move on, when would it be "appropriate" "PR-wise"? After he comes back? A few weeks after? They all seem like bad options.
I can't help but wonder if this is to ensure he gets a good severance package before Musk comes in and cleans house? I can only hope, but it doesn't seem likely based on tone :(.
A low level IC would not be called while on leave to be fired. But when the company needs a change of excecutive leadership, they aren’t going to wait months because you had a baby. I’m sure he’s being paid through the end of his leave period and besides is compensated in the millions.
Maybe they would like to focus on their newborn, their wife, the new family dynamic - you know: important things - and not some stupid web app - which is what I would assume, since they're on maternity leave in the first place.
I absolutely agree. I don't care what the work email is - even if it's "hey you're fired". You're making them work while he's on leave. The guy is tweeting all these bullshit, empty "my incredible journey" tweets for Twitter damage control.
OT but one thing I've noticed is that Twitter has scaled back its aggressive modal/login prompt when viewing the site without being logged in. This seems to have occurred recently. It seems like it would have nothing to do with the acquisition talks but, curiously, it coincided with them.
It's gotten a little worse, AFAI can tell. Every few days I have to re-load the Twitter tabs I've got in private browsing on my phone (without private browsing, the modals have always come much faster, basically as soon as I scroll down) because they start throwing modals. Then they're fine for a few more days. I didn't used to have to reload the page, ever.
This has not been experience at all. I receive this login wall pop up every time I look at Twitter, including today while trying to read this post. I generally look at Twitter once a day for some link that gets sent to sent to me and this is consistently true.
Why is Parag making any major changes at this point? What "new vision" is he going to execute in his last few months at the company before Elon comes in and torpedoes it anyways?
That's my point though. The board accepted the buyout offer. "Hands on the wheel" means keeping the lights on and making sure everything stays stable until the deal closes. Firing the company's product and revenue leads is the opposite of that.
You do realize it's going to be months before the deal closes, and there's a chance Elon walks away from it due to market conditions or other reasons? In this reality, counting something like this as done seems premature. The reasonable course of action is that plans made prior to this deal continue. Elon can sort it out if / when he takes the helm.
You're assuming that the deal will definitely close.
The deal can still fall apart for a number of reasons. The risk of this happening is far from remote. This is evident from the current stock price of about $46, which is significantly lower than the $54.20 Musk is offering.
Only reason twitter hasn't tanked is people holding on hoping this deal goes through otherwise it would have dropped significantly with the rest of the tech index. My point is that its market cap is artificially overvalued currently on hopes that elon buys at 54$ (which i doubt he will)
I too believe that he'd be crazy not to renegotiate.
As far as I recall, they agreed on a break fee of ~$1bn if Musk walks away. But if he can lower the price to $40 a share (which is still far higher than market would probably be, at least in this market), he gets Twitter at $31bn instead of $42bn.
Yep. Aside from Musk having the attention span of a 6 month old puppy: the margin loan requires Tesla's stock drop less than 40%, otherwise he has to personally bankroll the Twitter purchase.
Right now it's down 26% this month, more than twice the general market drop, and shows no sign of slowing.
Musk has already started trying to ditch the margin loan.
These mergers never are almost never at parity months before closing. This one isn't even so far a spread, 15% rebate on proposed takeout price. Activision, with an offer from Microsoft for which even Buffett is partaking in the arbitrage, sits at 20%. Even back at the announcement in January, before this market turmoil which can threaten these deals, it traded at a like 14% discount.
With that in mind, special situations are clearly still a valid strategy.
Indeed, there's no such thing as free money. You get payed (or burned) when trading on these mergers for bearing the risk of the deal failing or renegotiating.
If the market was highly/certainly confident the deal was going to go through it would be at ~54.20$ or higher (technically, although not likely much higher).
If you're 100% sure the deal goes through then that's essentially a free 6$ per share guaranteed right now.
Out of interest, why higher? Twitter does not pay dividends, and if you discount it to today, the 54,20$ in the future are worth less than 54,20$ today since no interest is paid on these shares? Even when i take inflation into account, the 54,20 have more buying power now than in the future so again I dont see why you would pay more.
Interestingly if the market was 100% sure the deal would go through I'm not really sure how it would work because that would mess up the options chain IV. The main reason would be speculation other's might push it higher before the actual deal. Call hedging will amplify this but it would be weird in this scenario.
EDIT: Actually it could go higher because of people covering cash-covered calls that are exercised or closing shorts that existed before the announcement - see below.
--
It looks like Twitter actually did go higher then 54.20 on April 5th to 54.57~54.92 [1]
The reason why it did IRL is several factors. One is speculation it could go higher due to volatility/inefficiencies. The biggest reason is most likely hedging against sold call options and closing short positions - which are both essentially positions that the deal won't go through. If somebody sold a share of twitter for 50$ thinking it would go back down but now wants out of the position they must buy the share which increases buying pressure and thus the price. Similarly if somebody sold a cash covered call and is exercised or hedge against it to limit losses they must buy shares at the current price (which is 100x per option). Again this increases buying pressure and thus the share price.
I swear there's a few other reasons I can't think of right now. It's basically from market inefficiency factors. Speculation (of the share value not future company value per-se) and hedging are the main ones in this case. In non-acquisition scenarios other factors include portfolio rebalancing, margin-calls, market orders,
and poor order-book liquidity.
[1] I'm seeing different numbers from different sources but they're all around there - I'm not sure if they used sale price or the quote price etc, quoting a stock is a whole can of worms in itself.
Disclaimer: I can't claim to be any type of expert - some of this may be incorrect, and I'm a bit rusty
And the only reason it’s $46 and not lower is that people are staying in the stock waiting for the Musk 15-20% payout. When it becomes clear that Musk isn’t buying Twitter, Twitter stock will implode instantly.
I wonder if he'll try to renegotiate the deal at a lower price. Given the entire tech sector has fallen precipitously since the first announcement, it wouldn't surprise me if Twitter's board accepts a haircut and does the deal anyway.
Knowing Musks shenaningans, it's likely he wanted to sell his Twitter stock but wanted to pump it first with a semi-formal offer. Same he did with Crypto/Tesla.
Not surprising that Twitter board would call the bluff. Even if Musk tries to renegotiate to save face, the Twitter board will look better to shareholders by saying no to even lower offers.
There's a real risk the deal doesn't close. The lower TSLA goes the further away that deal gets. I think keeping the hands on the wheel to me means staying the course - executing on roadmap and vision - until the money is in the bank.
Could just be that Kayvon Beykpour got replaced by someone better at the job?
Baseball fans know of Wally Pipp, who was a solid first baseman for the Yankees for a decade or so. One day Pipp had a headache and was replaced in the lineup by a young Lou Gehrig, who turned out to be one of the greatest hitters in baseball history.
I have no idea if Jay Sullivan is a Lou Gehrig talent, but he's been doing the job while Beykpour is on paternity leave. If you're the CEO of Twitter and you believe the temp guy is doing a better job, why not make the change?
All I know is that Jay Sullivan has tweeted less than 700 times in his life, which does not suggest fantastic engagement with the product he’s supposed to be leading.
Elon Musk's networth is a big mystery. Not because its private information (we all know Musk's holdings for the most part), but because in 2 or 3 months, the Fed will meet a few more times and may raise interest rates again.
TSLA's stock price may be $1000 by then, or it might be $500. If its $500, Musk may not have the physical money to finish this buyout offer, even if he wanted to.
This entire deal was made when Tesla was near $900 or thereabouts. But then the stock market started to change severely, the bond market changed severely, and now there's a lot of uncertainty if anyone really has enough money for everything to go through fine.
---------
Twitter's board has to keep both possibilities in mind. If Elon Musk's buyout offer fails (either due to Musk personally, or because of changing prices which rekt Musk's networth), Twitter will still need a plan for a Musk-free Twitter future.
Why's that? There's a significant chance this deal won't close. There's also a chance that the deal will close and Parag will be kept on. And even if it happens and Parag goes, I don't think there's a great business case for just putting everything in amber. Twitter's competitors are moving ahead, so just freezing things will give them extra months of lead that Twitter can ill afford no matter who's owning it.
I think it's somewhere between possible and likely that Parag ran this change by Musk. Who is already on record as wanting high-level changes. So this could be just as easily read as the CEO honoring the board's acceptance and getting started early on the changes. Or it could be both: Something that both the current and future CEO saw as in the bests interest of Twitter.
The fact that the stock price is roughly halfway between the pre-Musk price and Musk's bid suggests the market expects roughly a 50% chance the deal will actually go through.
its probably higher than that. Imagine what it would be if it had crashed along with everything else in the market. If the deal breaks the stock is probably worth 25-30$
Board may have accepted the terms but the valuation of twitter has since tanked as have the equity markets as a whole. As have musks fortunes from an equity perspective so unless all the numbers recalibrate to everyones liking deal is dead imho. The world outlook has changed since this was getting hashed out.
So there's a few things that could be in play here.
1. The tech market right now is a shit show, Twitter has only been saved from the general market trends because of the Elon offer. Once the Elon offer closes or falls through, Twitter's stock will correct. While Twitter is healthier is the time to get set up for that inevitable correction. The current market is driving fairly drastic action in the Tech Sector, just ignoring it because you're, potentially, a lame-duck CEO would be irresponsible.
2. These firings and changes may have been in the works since Parag took over so this is a course of action that predates the Elon offer.
So…if the deal goes through the stock cannot “correct” because there will be no open market for twitter shares.
Elon is proposing to buy all the shares, not just a controlling majority. Twitter would no longer be on the NYSE.
So twitter can be saved from general market trends indefinitely, as long as whoever is bankrolling it can continue feeding it cash whenever twitter operates at a loss.
Elon isn't going to hold 100% of the shares. He already has a ton of VCs and other outside investors (including some funds) lined up to finance the deal. So Twitter will still be active on private markets.
if you need an example of "hands on the wheel" look to nvidia's attempted purchase of ARM. all board says ok, all shareholders ok, passed through a lot of paperwork but no deal in the end.
Both Nvidia and ARM definitely needed "hands on wheel" regardless of what happened.
"Keeping the lights on" isn't enough: to be a good CEO, he needs to keep making progress, especially on shared goals of both old & possible-new ownership.
One guess (albeit not one of high confidence) is that the outgoing head may have expressed some reservations about whatever balancing-of-concerns Agrawal was expecting, or even mentioned a firm intent to leave if/when new-ownership arrives. In that case, it'd be very reasonable for the CEO to say, "I need someone here who at least has a chance of, and can earnestly simulate an intent to, stay through the change-of-ownership."
That's not how acquisitions work. Elon made the offer, it was accepted. Now the company has to continue to operate without his influence until the deal actually closes.
There isn't any guarantee that the deal will actually close, especially with tech stocks (and much of Elon's own wealth along with them) taking a dive.
If those changes were planned before Musk's offer, wouldn't changing the plans to that "keeping the lights on and making sure everything stays stable until the deal closes" be opposite of operating without his influence?
Operating without his influence means not inviting him into the boardroom and not taking directions from him. They can still make their own decisions on how best to prepare for the acquisition. That's something every company in that situation does.
What's your citation for the notion that post-acquisition changes never happen before the deal fully closes? I grant that irreversible structural changes are rare, and cross-company integrations of course can't happen. But here this isn't one company acquiring another, and it's just changing one exec. Maybe you're right, but I've never seen anything showing that.
Musk's financing is secured in part by his Tesla stock. Rumor had it that $740 was the share price where the lenders had the contractual right to withdraw their financing. As I write this, TSLA is $716. (Don't remember where I read that; but whether or not it's the actual price, I'm sure such a clause exists.)
Elon Musk has no intention of actually acquiring Twitter. He's just using it as a smoke screen to liquidate a huge amount of Tesla stock. The fact that TWTR is currently trading at a 25% discount to the supposed acquisition price shows I am not the only person in the market who doubts the ultimate consummation of the acquisition.
Interesting thought. But if he doesn't go through with it, he will be on the hook for a $1B penalty. Is that perhaps a selling fee that makes sense for him to pay?
Are you certain Elon would torpedo anything? What if it the move he would make as well? Would he still torpedo it? I am not sure how anyone can say with certainty what Elon will or won't do.
Is the twitter deal actually happening? Elon had to get a loan using Tesla stock and if the price of Tesla drops a lot then the whole loan and deal falls apart. I don't know if we know the exact stock price number where it happens, but it's seeming pretty dicey with Tesla continuing to drop in value IMHO.
As of last week, there is $7 billion in outside funding -- new money and existing shareholders that will retain their stake. That cuts the amount borrowed on the back of $TSLA in half.
I think Parag is making decisions that he sees as inevitable, whether the deal goes through or not. The deal, and all of the discussions that have come from it about the future direction of Twitter, is probably enough of a catalyst for certain changes. Twitter is likely not left unchanged even it falls through.
Must have been bad blood if he wasn't even given the opportunity to resign and save face. I can't even imagine the vipers nest of toxicity that building must be at this point.
Might be a severance issue. If he resigns, no severence. I imagine if he is fired he gets some. So he might have forced them to fire him. I know I would.
> Parag asked me to leave after letting me know that he wants to take the team in a different direction.
I interpreted that as he was asked to resign. Which in practice most people consider the same as getting fired. At this level it's rare for someone to actually get terminated though, you would have to do something illegal or highly inappropriate. It's almost always that you're asked to resign and you get a generous severance package to go with it.
Interesting that he co-founded Periscope and they also just removed any mention of Periscope from their TOS. Maybe just an artifact of them considering removing him, or it has no meaning. Just found the timing notable.
Yeah, but it's the rank and file employees who will now think "I'm not there to defend myself against being fired if I take maternity/paternity leave" who will suffer most. The ones who won't be getting a severance larger than you can ever imagine.
> Yeah, but it's the rank and file employees who will now think "I'm not there to defend myself against being fired if I take maternity/paternity leave"
If an executive is gunning for a rank and file employee, there is no defending yourself except through wrongful termination lawsuits, etc. Being sat in the office when it happens won't help you save your job from an executive that wants you gone.
The severance is on top of the $20M worth of TWTR stock he already holds, according to public records. Plus whatever other assets he holds, which I would presume to be not insubstantial. I think he'll be OK.
yes, they should have waited... paternity leave isn't vacation, it's leave you're taking because you're living in stressful conditions that make it hard to get things done
that said, in this case this guy's likely a millionaire so it's less of a big deal... kind of rude though
I may be wrong, but I assume that once Twitter becomes a private company there will be no more board and Elon will be the CEO. Parag may stay at the company in a different role.
I don't think Elon particularly wants to be in the actual driver's seat of Twitter. That's a job and a half, especially when he already has SpaceX and Tesla to manage. I rather assume he will have someone competent at the helm to which he can give incredibly broad orders like 'figure out how to make free speech work'. Though that doesn't mean Parag won't be out - the competent person is likely to be someone who is not soft on free speech like Parag is, and there's a good chance it'll even be Jack.
I suspect this was done in part because Elon Musk wants to make some big changes. It would be best for the outgoing CEO to make these difficult firings and then let Elon Musk come in and set a new tone without dealing with this negativity falling on Elon.
I'm not saying this is right, but it makes a lot of sense.
So there's two options right - the first is that Parag is for some reason making big strategic decisions about the direction of the company despite the fact that we all know he'll be gone if the deal closes. Or he's making big strategic changes at the behest of the acquirers before the deal closes.
Neither of these things seem particularly kosher moves to make. The question is how to figure out which one it is.
It would seem weird for Parag to be following Musk's orders given how Musk has behaved. It also seems weird for Musk to already have the insight into the company to know specifically who to fire. There's not much advantage to making these changes now.
On the other hand, going rogue and making big strategic decisions about the company really has the potential to burn Parag's reputation for wherever he would move next.
I guess there's a third option - that Musk has expressed a specific view, Parag has a different view, but that they both think that this move is necessary anyway so just got on and did it.
Was there a time in the past few years where Musk wasn't actively investigated by the SEC? Hasn't hindered his business ventures much, so far at least.
You're discounting the very real possibility that Parag is operating as if the deal will not go through, and is making large strategic decisions in anticipation of that being the case.
For Parag, I don't see it "burning his reputation" at all, considering either a) he's right and will face the tall task of helming a Twitter that continues to disappoint its investors or b) he's wrong and it won't be his problem when Elon fires him next year.
The probability that Elon is margin called by year end is roughly 40% according to option prices.
- 60% chance you get fired either by Musk or investors if you don't turn the ship.
- 40% chance you Musk is margin called and doesn't take over, but still might be fired by investors or acquired by someone else who may in turn can him.
His wealth is mostly owning 20% of Tesla, plus some extra few billions from owning significant fractions of SpaceX, The Boring Company, and Neuralink. Presumably there’s some cash in there as well, but on his scale a hundred million is a rounding error.
It still confuses me that being part-owner of an old dot-com payment company, part-owner of a mid-sized car company (by number of cars sold), and part-owner of a (very good) rocket company make a person richer than anyone has ever been in the history of the planet, but that's probably because I just haven't looked into it enough.
That "mid-sized car company" has revolutionised an ~120-year industry while still managing to remain at the forefront, that's why its valuation is so high (even though I also do believe it's over-valued).
I'm not saying this as a Tesla-lover nor as a fan of Musk, in fact, as a lover of gasoline engines and of cars in general I see this as a tragedy (I regard EVs as refrigerators with some wheels attached), but it is what it is.
People constantly attempt to pretend Tesla didn't spark the EV revolution, because they can't stand to give Musk and or a US company credit.
It's the same reason they aggressively pretend Apple didn't spark the smartphone revolution (when it all very obviously derived from the iPhone and its dramatic impact, right down to the design of the phone and interface being copied by everyone else).
It's the same reason if you say the US invented the Internet here on HN, you'll get confused replies by people from outside of the US that are entirely ignorant of that fact, because of foreign revisionist history and the desperate desire to deny the US credit for its vast accomplishments (the America bad brigade). The same goes for eg the transistor, microprocessor and countless other prominent technologies that revolutionized the world.
It's still a business and it is tiny compared to the big players. Tesla is only a slightly better value than crypto given how insanely overvalued the stock is. If the company had an $80B market cap, it would still be vastly overvalued.
If Tesla had a market cap of $80B it would be trading at 6.06 times Q1 earnings annualized. Having grown revenue 81% and gross profit 147% in the prior year…
It’s currently undervalued at 10x that price.
Re being small: its operating income was greater than Toyota in Q1, and it has two new factories that are yet to ramp production.
Renault were working on the since before 2008 (2005 apparently), yet they only brought a product to market in 2012.
The Tesla Roadster was developed around the same time, yet deliveries started in 2008. By the time Renault got around to actually making the Zoe available to customers, Tesla had been selling the Model S for 6 months. I don't think they were taking EVs particularly seriously if they took that much longer to put out a less sophisticated product despite having vastly more resources at their disposal.
Sure, because the Tesla Roadster is half a car, and cost is no object. They literally took an existing car, and built an EV conversion kit, money be damned.
Making the first mass-market EV was going to take multiple years, no matter what. You need to engineer the entire car, at scale, and you need to hit a price-point. Tesla didn't have such an issue. I can't stress enough how much more difficult it is to make an affordable product than one where price is no object.
But why? Did tesla open source key scientific innovations in the scaling of batteries?
Don't think so.
See e.g. The seres f5 from Huawei. I don't know wether it's great but about the main metric, it has a higher range than teslas (1000km)
This is a bit of a "why dropbox when i can rsync" comment.
Tesla brought glamour and practicality to a field stymied by boredom and theoretical concerns. They pledged to build an EV people would actually want to use, bringing all the latest tech to drive UX with no regard for tradition. They set to solve consumer problems, and they are succeeding in doing that.
Great drive UX as opposed to what? Have you driven a modern Mercedes of the higher price tiers? They're pretty damn great to drive or be driven in (comfort and fun wise), but they don't have gimmicks like the door thing and such. If you're talking about those gimmicks I disagree, and if you're talking about "motor/battery/esc technology" I also disagree, they didn't innovate anywhere, they just hit the right market with their product in my amateur opinion.
If they "hit the right market" it means that market had not been hit before, so by definition they've done something new.
I don't have an interest in Tesla nor do I particularly like Musk, but objectively speaking, they must have done something right - they started a mass-car company from scratch in the third millennium, something very very hard; they popularized a technology that had failed to get traction for decades, and have taken the fight to behemoth corporations that had been bearish on the sector's overall future since the '90s. That simply cannot be just marketing or "gimmicks".
Glamor? Sure. Practicality? Eh. Maybe for daily commuting. When the IC companies convert over, Tesla shareholders are going to feel a ton of pain. The novelty will have worn off and the company will still pace at a mere fraction of its competitors. And at the very least, they'll all have vastly better QC than Tesla.
Yes, but people don't buy vehicles simply for commutes, and IC vehicles will be around for decades for actual work. Nobody along the gulf or southern east coast is going to be buying an electric car as their sole mode of transportation if they have any common sense.
If 90% of the time one can own a median vehicle wherein they never have to go to the gas station, the vehicle lasts 1,000,000 miles, they aren’t emitting CO2, and gas prices go past five dollars…
it might be common sense to use the savings from the situation to rent vehicles to satisfy the other 10% of your needs.
"Common sense" = "I want to be able to get out of town without being stranded on an interstate when evacuating for a hurricane when traffic comes to a standstill and there's no way to recharge."
But hey, maybe your idea of common sense is to sit around 16 feet in the air with 120 mph winds blowing against the side of your moving brick.
The only people who buy a car for their median usage are people who can afford two (or more) cars.
Everyone else has to buy to cover the 99% pctile or they’re screwed when they need to do something somewhat unusual (long drive to grandmas house, move, vacation, family emergency, whatever).
And for those who say ‘just rent!’ - I’ve tried, and most of the times you’d want to, you can’t get a rental, because a bunch of other folks got there first! Rental companies can’t buy enough cars to handle peak usage a few times a year.
The "supercharger" network is something that no other manufacturer was doing or was seriously interested in doing, and it's an extremely practical concern.
> When the IC companies convert over
... a lot of them they might well end up buying batteries from Tesla. Tesla will also continue to be the benchmark against what EV will be measured, in the same way Ford continued to be a reference for decades after competitors matched them.
Tesla dragged the rest of the auto industry, kicking and screaming, into the EV business.
EV was, at best, a curiosity and definitely nobody's main focus, until Tesla first showed EV cars are not golf carts (with the rooadster) and then that they can be a desirable higher-class sedan (with Model S).
If Tesla went bankrupt today, we'd still be firmly on the path to phase out ICE cars.
This was totally unconcievable just a few years ago. Tesla did that.
citation needed. many of these companies had documented plans to transition to primarily electric vehicles over a period of many years. why is it that you are so convinced that this market shift was causes by one brand? is there any evidence other than observation?
> Tesla dragged the rest of the auto industry, kicking and screaming, into the EV business.
I would say that the advance in battery technology, the laws introduced by state of California and north european countries did more than Tesla ever did.
Also the Renault Zoe, still top selling EV cars in europe, had her first concept car showed in 2005 and was on sale only 5 months after the Model S in 2012. The Leaf also predates the Model S.The 1st generation Tesla Roadster sold poorly like most other contemporary EVs and most of the sales happened in her last year in 2012. It was as niche as all other EVs in the market in its first 3 years of commercial life. The Mitsubishi i-Miev and its Citroën and Peugeot variant outsold the Tesla Roadster by more than a factor of 10. Almost 30000 cars between 2008 and 2014.
What Tesla achieved was showing the wealthy people they could greenwash their way to the same energy wasting life by going EV. A good publicity stunt.
Zoe was a concept car, as was VW eUp. At the time, established car companies were doing concepts that looked like golf-carts and taking about "e-mobility".
Look at i-Miev and the Roadster and tell me which one do you think a typical car lover would love more. If you think that would've taken over the car market .. then you're definitely not in the same circles I am :-)
Other car makers started paying serious attention only when Tesla inexplicably didn't go under and Model S started to be a success.
The first Zoe was a concept car, the second one was a production model and it didn't popup from anywhere. It has been the most sold EV in europe for many years already.
>Look at i-Miev and the Roadster and tell me which one do you think a typical car lover would love more. If you think that would've taken over the car market .. then you're definitely not in the same circles I am :-)
The car industry do not care what the typical car lover love more. They have been a dying breed for more than 3 decades. The i-Miev and derivated counterpart sold 12 times more than the roadster because they are actually usable things and not enthusiast toys. It even outsold the Model-S in all the other markets than USA when they were both available.
The Model-S,X,3 and Y success came much later. The automotive industry definitely had a more cautious approach in the upper end segment but they weren't sleeping.
Zoom out a little and try and think about the bigger picture.
In many industries, you can see these "bar-raisers."
Starbucks didn't invent coffee, but they created a mass market for a more premium sort of coffee in a country that previously didn't see coffee as something more that a thing you chug down in the morning so you can wake up.
Nintendo didn't invent video games, but they raised the bar for home consoles after the "great video game crash" and have repeated the feat several times since despite rarely if ever being on the cutting edge of tech.
And so on.
Tesla did something similar. Previously, electric cars and hybrids were seen as dorky and decidedly uncool by most. Tesla changed that public perception. It's hard to imagine the "luxury" electric car market existing without them. Perhaps another company might have accomplished the same feat, but Tesla was the first one to pull it off.
From a raw innovation standpoint, these advances are huge because by creating new market segments, they ensure a flow of money into those markets. Tesla's expense has paved the way for billions if not trillions of dollars into EV R&D and battery R&D. That matters, a lot.
To answer your question, they did open source their innovations. In the future you should consider not asking rhetorical questions that you don't know the answer to. Also, when you don't know the answer, you probably shouldn't pretend to know. Other people might make the mistake of thinking you are informed rather than a productive citizen of the society which exists in your imagination.
As to why - ICE dealers didn't want to lose recurring revenue streams and ICE manufacturers didn't want to disrupt the means through which they would service the loans that they took out to build out their present ability to manufacture at scale. The incentives were perverse and in some cases still are perverse enough that the ICE industry has to be forced to help kill itself off, rather than dying willingly because it is right.
At the end of the day you can't explain love and people love Elon Musk. Guys from all over the world are in a sort weird parasocial relationship with the guy. That never happened with the CEO of MySpace and BlackBerry
I think you will find a much bigger 'silent mainstream' of those who Respect him for the significant progress he's brought into our world.
Worship and bashing/hate are the domain of the crazies/extremists/zealots who are a vocal minority, really a small proportion of the world. Most people thankfully are more balanced and rational in their perspectives.
Nissan was selling the Leaf after the Roadster but before the S/X/3/Y.
The Leaf and the 3 basically met in the middle at the same time at about the $45K price point for similar cars.
Tesla was only first in the category of outrageously expensive cars for virtue-signalling rich people who fake-care about evironmentalism. And fake self-driving.
I bought a top-spec 2015 LEAF for $33K before $10K of incentives. If someone paid $45K for a LEAF around the 3's launch, it better have had $10K in cash in the trunk.
Looked at another way, if the LEAF and 3 cost the same, would many people have bought the LEAF?
Similar cars? Sure, they both have four wheels and are electric. I don't see many similarities though.
Tesla's emergence put the world on track to end ICE cars at least a decade sooner. That is a lot of CO2 that will not be put into the atmosphere. Getting people with expendable income to fund it is both a smart strategy and very equitable.
Their recharge network still sets them apart as well.
That is quite unreasonable to expect. The Renault Zoe came out at around the same time as the Model S and had over 150km of reasonable range, at half the price a Model 3 sells at today. It was already competitive.
150km of real world practical range is more than adequate. It's only 50% less than what the model S was when it came out, which is more than enough for the majority of people in the world.
Tesla produced the first ICE-equivalent EV sedan that was not merely a "compliance vehicle" in decades.
Then, it turned out, people bought them by the hundreds of thousands, single-handedly recreating the market for EVs.
Then, other manufacturers noticed, and started realizing they might be left behind if they didn't take EVs seriously.
Now, sure, there are many competitors, but even still they have only been built in small quantities.
How long Tesla's edge will last is an open question, but there's no question that Tesla has single-handedly exploded the demand for EVs in the consumer vehicle market.
I am not an expert in cars and yet I know the Renault Zoe was commercialized in 2012, the year of the model S, for a reasonable autonomy and a much, much cheaper price. I believe tesla were the first to sell low volume, pricey EV cars.
Their range and timing advance is only because of choosing the rich over the middle class, aka a lesser impact. Although it's true EV were and remain not cheap but it's getting quickly much better and it's definitely not tesla that will lead the dance of democratisation
If you took the badges off, I think most people would have a hard time telling the LEAF (EV) and a Versa (ICE) apart. The LEAF is no 911 or Jaguar E-type, but it's not a "hey, look at me; I'm electric!" clown car either.
Didn't the Zoe have a 22kwh battery? I don't doubt that it was practical for some things, but that was exactly the kind of car that many (especially in the US) used as an example of the "impracticality" of electric back then.
The real ace was releasing an EV sports car, the Tesla Roadster. That's what caught people's attention. They were able to see how EV drivetrains were actually better than their ICE counterparts and that electric motors can do much more than drive golf carts – despite having powered everything from submarines to locomotives, people still thought they were weak.
Otherwise, Nissan would have been Tesla. They have produced some of the first practical EVs, way before Tesla did. Unfortunately, they made them for the Japanese consumer, not for the average american. At least not initially.
Nissan would never have been Tesla. They might have been the largest producer of EVs if history had run a different way, but that's a million miles away from being Tesla.
You’re right that the Tesla Roadster led the charge — no pun intended — for EVs as uncompromising vehicles.
But I don’t think Nissan would’ve been Tesla: they didn’t think people would pay for a full-range EV (and still don’t, looks like?) and didn’t prioritize it. For many Americans that means the LEAF could not be their only vehicle.
The supercharger network also played a huge role in normalizing EVs, in particular in making the Tesla Model S the first car you could convince yourself was a great car that “happened to be an EV”. The S isn’t perfect, but it doesn’t have any huge, obvious EV-related deficits, like the LEAF’s range and charge time.
"The high-end market is only a small part of the numbers" correct, but in a parallel universe where Tesla didn't exist & the typical EV looked & performed like a Leaf, would anyone actually want an electric car? Marketing and psychology are important.
The Leaf that Nissan sold while the Model S was Tesla’s only sedan (ie 2012-2017) was not an ICE-equivalent vehicle. It was explicitly a city vehicle with a < 75 mile official range, an effective 40-50 mile range, and no fast charging.
If “high-performance” means “can handle the daily driving needs of > 50% of the population” then I guess you’re right, Tesla only created that market.
The daily-driving needs of 95% of the population are incompatible with a 100k$ car. The Leaf fit the needs of more people simply by virtue of having an acceptable price.
The Zoe also had a 150km+ effective range, which is more than enough for most people (maybe less so for Americans).
The Model S was the first EV that “happened to be” an EV. You didn’t have to compromise on range, power, comfort, or anything else to own it. That’s why it succeeded. It was a great car, and happened to be an EV.
Tesla’s chief designer himself: “We are past the idea of an environmentally friendly vehicle needing to look different. People don't want to sacrifice anything, including style, to own an efficient car.”
You definitely needed to compromise on range power and comfort. The 60kWh version was more expensive than an BMW M4, S5, or A6, all in more powerful, comfortable, etc...
You definitely had to compromise to own it, on almost everything aspect. Despite everything else, people were buying it because it was electric.
Every $100k vehicle is different, that’s not what “compromise” means. And the Model S had comparable power and comfort — not for everyone of course — to the cars you mention. Obviously people were buying it because it was electric, that added $30k in battery cost alone, you wouldn’t do that if you didn’t care about it being electric.
But my point is that could do everything an American expects a baseline car, like a Honda Civic, could do - it worked as a car in addition to being electric, which is more than can be said for the Leaf and Zoe, on range and charge time concerns alone.
The Model S had far inferior comfort, especially the 2012 version. It got better. You had to compromise on everything in exchange of getting an electric car.
> But my point is that could do everything an American expects a baseline car, like a Honda Civic, could do - it worked as a car in addition to being electric, which is more than can be said for the Leaf and Zoe, on range and charge time concerns alone.
Sure, at 100k$, which is too much for what an American expects of a baseline car. I am sure Renault and Nissan could have done it to if they had multiplied the price by 4, but then it would defeat the entire purpose of a practical everyday car. It's like saying that Ferrari makes practical every day cars because of the GTC4Lusso.
I can't tell if either I'm doing a terrible job making my point, or you're deliberately misunderstanding me.
Let me ask you this: The Model S outsold the Leaf and the Zoe, and helped launch a new car company that has now sold more BEVs than any other manufacturer. Why do you think that is?
One possibility is that they made EVs that many people wanted to buy, and people bought them. I'm proposing that this is the case, and the fact that the Model S sold well despite costing $100k is an extremely strong indicator of this.
New EVs, even those from established manufacturers, are emulating Tesla, not the Leaf or Zoe.
Without Tesla, we may have had many Leaf or Zoe-like vehicles, but given how uptake of those vehicles went, it seems unlikely that we'd be where we are today -- in California, in 2021, BEVs were ~10% of all new vehicles sold.
Personal opinions of the cost or style of Tesla's EVs aside, one can't deny that Tesla made EVs attractive in the eyes of Californian consumers, and as goes California, so goes the world (for better or worse).
Don't forget the importance of charging either. When the 3 came out, GM was considering the Bolt a direct competitor. They had the mindset that people were only buying these as city cars.
To this day, GM sells that "direct competitor" with a ~55kw charging limit.
Tesla is what made the other manufacturers realize that people were willing to wait 15-25 minutes on DCFC while road tripping electric cars.
The revolution is in manufacturing and vertical integration: you have to look at margins. Tesla’s operating margin was 19.2% in Q1, and is apt to rise. Very few other companies even make a profit on their EVs, and none that do are anywhere close to Tesla’s margins, to my knowledge. This means that nominally competitive electric cars aren’t. In principle Tesla could squash its pure EV competitors by selling below their cost of production, and any legacy auto company transitioning to EVs will be in a similarly dire position.
Incidentally, these margins are also far higher than those of ICE manufacturers. For example, Toyota in Q1 had lower operating income than Tesla, despite having 4x the revenue.
There is no revolution to speak of. Tesla is an evolution in the high-end EV market. In the mid-range market Tesla was late to the punch and faces stiff competition, and in the low-end market they aren't an entity to speak of.
iPhones are in the low-end market because you can buy them used at reasonable prices. You can get an iPhone SE 2020 for less than 200$. You can't get a Tesla used for 5000$.
There's no competition in the mid/low cost market - there are no mid/low cost EV's. The leaf rides like a bottom end ICE compact and costs as much as a very nice ICE sedan, and not really that much less than a low end tesla. Honda/Ford/Toyota don't have anything in the EV space. They might have something on their web sites, but no dealer will have them in stock.
Of course there are low end EVs. The Wuling Mini EV (which is the worldwide best seller iirc) can be had for 10,000$ with 200km of range. Also, at price of a Leaf or Zoe, you don't get a high end sedan, you get a Honda Civic, which is one of the cheapest sedans.
I'm not sure if the target market will be even the elite, but upper middle class. Which happens to have gotten rich working in semi-associated markets.
Tesla is currently valued at over 20x Ford even though Ford did 13x Tesla's revenue last year. That stock should have dropped through the floor a long time ago.
It is because (some) people believe/have faith in Musk. To some, he is a icon/leader to follow blindly. They trust him a lot.
Which is because, his work/impact as ceo is visible on company and industry levels. contrast that with mba shortsighted ceos and/or ceos who sit on their assess waiting for golden parachute to deploy (thats the sentiment, irrelevant if unfounded). Charisma and beeing somewhat casual/releatable person on tv also helps.
Only makes sense if Tesla becomes something else other than a car manufacturer (robots, robotaxis, etc).
If it's just about EVs they should soon be priced below Ford. Even self-driving is insufficient as long as a driver needs to pay attention. Other companies are catching up - who cares if they need more hardware and can't do just vision, it's becoming cheaper.
The majority is due to the fact that Tesla's valuation skyrocketed in 2020-2021. The second-largest car maker by market cap is Toyota at 217B. (They're about double VW group, the next-largest.)
Tesla's market cap is now 740B. For a while there it was over 1T. Here's a fun visualization:
> part-owner of a mid-sized car company (by number of cars sold)
Because the market doesn't, and shouldn't, value things solely based on a snapshot of current business, as opposed to a projection of future business, based only partially on the current snapshot. A phrasing that gets at the market's thinking looks more like "A car company that effectively created the electric car market, right before the entire industry started making credible commitments to switch primarily over to EVs, all while being the most successful company at getting some degree of automated driving into consumer hands and awareness". Your phrasing implies "pre-Cruise GM, but with less sales"; it's no wonder why you're confused.
Note that I'm not claiming that Tesla is appropriately valued right now, and as someone who works in AV, I think their approach to self-driving is misleading and irresponsible. But it sounds like the bulk of your confusion comes from a significant misunderstanding of what the stock market _is_.
The stock market is not about retributing merit though. When the EV market will be very significant, there will be no strong reason to choose a tesla over dozens of alternatives. There will be Huaweis/xiaomis equivalents for cars.
Not to forget much more strong brands outside the tech circles. It is not like all of Porche, Ferrari, Aston Martin, McLaren and so on just drop dead and stop producing cars. And these have much bigger brand value for traditional customers than Tesla will ever have.
As I said, I don't think tesla is properly valued right now (though I haven't looked into their financials rigorously enough to have a strong opinion).
The market is betting on Tesla being "Apple for EVs", with a combination of first-mover advantage and innovative secret sauce. Apple similarly had competitors but an Apple bull in 2008 is a very happy man today.
I was narrowly responding to the parent comment's misunderstanding of what valuation is: specifically, the fact that it includes more than simply the current state of the business, incorporating future success as well.
"Tesla's market prices relies on super optimistic assumptions" is a sound complaint. "Tesla is a midsized car company" is a nonsensical one.
> But it sounds like the bulk of your confusion comes from a significant misunderstanding of what the stock market _is_.
I think OP would not be the confused one in 6 months time.
Stock market only cares about the future when people care about the future. AKA when there is optimism in the air.
The 2015-2022 wave of optimism was quite frankly uncalled for and overextended given the reality at the base level. Especially what happened 2020-2022.
> I think OP would not be the confused one in 6 months time
Apologies, but this doesn't make any sense. The OP referred to the current size of Tesla ("mid-size car company"), with no reference to future cash flows, which is what the majority of most stock prices are made up of.
Looking at where tesla will be in six months _is_ looking at the future, which is the exact opposite of what I was remarking on. If the complaint had been "Tesla is overvalued due to irratuonal exuberance that its future revenues are unlikely to deliver on", I wouldn't really have any disagreement.
I think Rockefeller probably wins when the contest is 'fraction of available wealth captured'. The world is far richer today than it was in his days. We have wealthier people, even inflation adjusted, but I don't think we've had any one since who owned so much of what existed.
I'm really confused how you're confused. What is a better way to become the richest person than by owning and growing a series of hugely successful companies that provide products and services to people?
To my knowledge, none of these companies were run at a profit during Musk's involvement. While this is a normal part of growing a business, it leads to a bias on what people think could happen - rather than what does happen.
How much money did musk really make? how much of it is an artifact of monetary policy.
I think that's the big difference that causes confusion here: Musk is wealthy, not rich. The companies are worth a lot, but generally not producing dollar bills for him. His ownership in companies worth a lot is why he's valued so high, rather than strictly how much money or cash leverage he has.
80% of Musk's wealth is either confidence in Tesla's future, or memes, depnding on your perspective. It's not even pretending to be about completed work.
It's on free fall.
Btw I just did an overview of the current EV market and there isn't even one car maker that is able to make them under ~35K$
VW and a few others will sell in huge volume next year (VW 1.2 million in 2023 actually, much more than tesla) but I see currently no validation from the car makers that they will reduce the costs. The main bottleneck is apparently the price of the materials and I don't see why they would get lower considering demand is exploding.
That's why I studied the hydrogen market and it looks like a lot of hydrogen cars are coming in the next two years, they will have greater range than EV and to be seen but are likely to be cheaper to significantly cheaper.
It's true that the availability of hydrogen is an issue but it will progressively be solved, California is already covered for example.
So yeah current bet is the démocratisation of carbon neutral cars in massive volume will be via hydrogen, unless EV materials price find a solution.
Well for one thing you're downplaying several massive, global businesses.
PayPal is a $25b sales, $4b operating income giant in the financial sector (payments / payment processing specifically). They have an $83b market cap and have sales equivalent to Germany's largest bank. Musk doesn't own a meaningful part of PayPal, it plays no role in his present wealth (other than he sold his ownership stake in PayPal to fund the early days of Tesla & SpaceX).
Tesla is very obviously overvalued by a lot (by $400b-$600b at least), there's no rational argument against that. However being a major owner of BMW, which is perhaps what Tesla is best compared to in size and profitability now, is still a rather dramatic financial position to have (obviously). If we (when the market does) adjust Tesla to a more rational valuation, Musk would be a lot less rich, but still among the ~20-30 richest on the planet. Owning 16% of a segment-leading, tech-leading, growing car company that generates $12-$14b in operating income, is a very good business to be sitting on.
SpaceX is a lot more than a very good rocket company. Their connectivity business will likely be worth tens of billions of dollars in the future. No other entity on Earth can presently match what they've accomplished in rocketry and satellites, that includes China, the US Government, Russia, or their corporate peers. The connectivity network they're building is exceptional and very, very difficult (and expensive) for others to compete with. The value of their ability to deploy zillions of satellites rapidly, will increase dramatically as more uses are figured out for such constellations (the US Government in particular).
> Owning 16% of a segment-leading, tech-leading, growing car company that generates $12-$14b in operating income, is a very good business to be sitting on.
Every rational thinking person sees Musk and his behavior and throws any financial statement produced by Tesla straight into the bin.
They are cooking the books 100%. Musk believes in manifestation, self-fulfilling prophecy and faking it till you make it.
In the early days of PayPal he'd order to get parts of old fridges, paint them black in order to convince investors that PayPal had "supercomputers"
It's confusing because wealth in this case is based on valuation, which in the case of Tesla is based entirely on what some people think the company will do, monetarily, in the future. In my mind, Bill Gates is truly richer than Elon, because he has a diversified portfolio and could convert more of his holdings into other, different holdings, with less friction.
Bill Gates would be straight up wealthier than Musk if he didn't donate half his wealth to his foundation. If you consider that part of his wealth (in the sense of total lifetime income so far, not figure spending power, so subtracting off personal consumption/spending), you don't have Musk being suprosinly more wealthy.
Considering the Bill & Melinda Gates Foundation is essentially chaired by the two directly, why wouldn't you consider that wealth (that they get nice tax treatment for donating to) isn't theirs?
Once he has donated it to the foundation, it is no longer fully under his control. It is a charitable organization, and subject to many laws about how the money is spent.
So it's never included in any measure of his total wealth.
(GP's point is that if it were, and also all the past charitable spending was, then Gates works be richer. (
The most successful payment company, the top car company on terms of valuation and the top rocket company. We've never seen that profile. Usually it's someone who had monopolized an industry like Gates or Bozo doing under one company.
That's kind of arbitrary because Microsoft is an OS, apps, computer, and peripherals company; and Amazon is a retail, logistics, and cloud services company.
Tesla is a battery-based company, but could also have been a transportation company and included Boring and SpaceX.
And Mastercard and Vida are both bigger in payments than PayPal. And PayPal was mostly Thiel's Confinity, which merged with Musk's X.com bank.
One theory goes that the same people are invested in Tesla and Crypto. If their crypto holdings are wiped out they might have to sell their stock holdings to keep their roofs over their heads. Even if it's not that bad they might become more risk-adverse now one of their big bets has failed.
Not endorsing that, not an expert. Just think it's not as absurd as you suggest.
You’re getting downvoted for no apparent reason, but there’s an argument to be made here that crypto crashing would cause retail investors to pull out of investments altogether, and meme stocks like Tesla would take a hit. Bloomberg, WSJ, etc. are all writing about this potential contagion effect today.
The more likely scenario is that some of the financial backers like Larry Ellison will ask Elon to renegotiate the buyout price due to current market conditions and the deal will fall through.
Twitter is worth a lot less than what it's trading for. Musk's bid is rather idiotically high. Twitter's shareholders will be desperate if they start to see the full mauling that other prominent, hyper overvalued tech stocks have enjoyed lately. They will take a lower offer accordingly, whether that's from Musk or other. The stock is going into the $20s if they don't take an acquisition offer from someone.
The question is not whether he's been successful. He has been, the question is whether this is the peak valuation akin to Cisco during dotcom and whether he is over leveraged at this point.
Some of that depends on whether Twitter can partially self-fund the acquisition itself over time.
Most likely it can, that much more so if Musk negotiates a lower price. Debt is very inexpensive right now, especially for large corporations with a strong balance sheet. If Musk owns all of Twitter, he gets their $6 billion in cash and their balance sheet has no consequential debt issues.
Twitter is operationally profitable, despite being very poorly run in terms of cost structure. Their margins on sales should be far greater than at present; they have a bloated employee count and have for a very long time. There's no reason Twitter can't spit off $1b in operating income on $5b in sales.
Further, Musk has ~$9b in cash (per Bloomberg), lots of very rich friends (eg Ellison, Google founders, VC billionaires, etc etc) that believe in him, and lots of assets in Tesla and SpaceX he can borrow $10b-$20b against if needed.
That said - I don't think levering himself to the moon is wise and I don't think paying $40b+ for Twitter is smart. Particularly at this point in time (with the global economy shaky, the US economy contracting in real terms, China's economy shaky, and financial markets sinking).
Survivorship bias is a hell of a drug. The real test to see whether it's wisdom or luck is to predict the next Tesla. I don't think many people who point to their Tesla stock performance as vindication could come up with a repeatable theory of investing. If they could, their TSLA gains would be nothing next to their next investments.
That's how I know people who make that argument don't actually know anything. It's like someone still talking about that great touchdown in high school at 50. Where's the next one?
You don't see Elon Musk bragging about his $22 million from Zip2.
Those companies don’t come often, but you don’t need many winners to be all set.
I saw Google before the rise, Amazon, Apple, Bitcoin and Tesla. I only acted on Tesla after seeing all the other ones before but didn’t put my conviction into action.
It’s not very hard: you read HN daily/weekly and listen to the trends. Pick one that keep coming and interest you and dig deeper, you are not in a hurry as HN is way early in the cycle, the danger is being too early and giving up before it catch up. (Bitcoin)
Pick one big potential winner, calculate the expected value as good as you can Good/Bad scenario, place your bet, let the time do it’s thing.
An example of a bet I didn’t do: Bitcoin was 1$, I knew that if it worked very well it could go to 1M$. Let say you think that the probability of success is 20%: (1M$/1$)*20% = 200 000 to 1. You then place let say 5k$ on bitcoin and forget about it for 10 years.
At the moment, I don't see a trend that catch my attention beside AI and for the moment I think Tesla will be the winner in that trend.
I don't like a world where the only way to assess someone is by how much money they make for investors. That's a bleak reality, so I prefer to act as though a person's behavior matters in the hopes I might create it by force of will. You can recognize the negative with the positive. Anything else is revisionism.
Other countries and economies have chosen not to reward value-creators for the value they create. So far this has not worked out well for these countries and economies.
> Tesla has plainly kicked the ass of the European and Asian auto giants
Tesla had 1.4% of all cars sold in 2021, by number of units. Going by revenue it's somewhere around 1%. It is kinda hard to see that as kicking the asses of the competition.
Kicking ass would be more like what happened with smartphones, where iOS + Android went from 0 to >90% market share in the space of five years, leaving Nokia, Palm, Blackberry etc. as brands nobody would assoviate themselves with. Nothing like that is happening in automotive.
You're comparing apples to oranges.
"iOS" market share is iphone market share, which is still very small but with a huge profit margin, android market share is the market share of dozens of phones brands.
Nokia and Palm both sell android phones in 2022.
I don't see how that's comparable to Tesla VS old automakers
1.4% is massive for a car manufacturer built from scratch in just over a decade. You can’t really scale car manufacturing the way an existing computer megacorp could scale phone production.
For the same sort of consideration for which one would buy a newspaper in the third millennium: there is something to gain from directing a powerful megaphone, even if it doesn't make money directly.
I don't have any background in finance, but it seems like there are a couple of possibilities.
First, given the recent precipitous fall in the NASDAQ, there's speculation that Musk will lower the offer (which seems quite reasonable).
Second, I'm not sure there's any reason to assume these new equity investors are paying the share price Musk is paying. If Musk pays $54.20 a share, and needs to raise 25% of the acquisition cost by issuing new equity, he could sell 49.99% of the new company at say, $30 a share to his partners and still raise the required capital.
Leveraged buyout at an inflated price in the short term. Banks backing the loans will get guaranteed interest payments on the loans plus a lucrative contract debt servicing and consulting fees in the medium term. Long term they'll IPO again and/or find a fool to acquire them.
Well I bought TWTR at it's peak... I'm voting my shares against a buyout (won't matter), mostly because it locks in a loss that I feel would have been recoverable in the next 5 years...
Right it seems unlikely to believe that Twitter is undervalued but that nothing else is equally undervalued to invest in after getting a small profit off of the Twitter investment.
I cunningly bought TWTR at the top too and thus was hoisted by mine own petard. basically as a retail investor I have no leverage so all in all I'm happy to just get my money returned.
> The probability that Elon is margin called by year end is roughly 40% according to option prices.
The way tycoons frequently do this involves putting collars around a significant portion of the margined stock (and for a sizable position like this, the trade would flow through to option prices on tesla and the stock itself via delta hedging or whatever the trade desks are doing as part of the trade)
> The probability that Elon is margin called by year end is roughly 40% according to option prices.
This sounds like “two more weeks, MOASS, trust me bro” level of analysis. How can you possibly have enough insight into Musk’s financial holdings to make such an assertion? Nevermind the structure of the Twitter deal itself, which doesn’t exactly require him to fork over $40 billion in cash.
Musk has published his margin loans backed by tesla stock. Those come with a clear margin requirement iirc.
It is then easy to calculate 'at this price, the loan will face a margin call'. Options pricing implies a probability of a certain price being hit by a certain time. So they imply a probability of the margin loans Musk has getting a margin call.
Ofcourse, getting a margin call wouldn't mean the loan falls through. Guessing that would require deep insight into Musks personal financials.
If the deal falls through then Twitter will probably have to announce some big changes to keep its stock price from falling too much. Although this move could have been made after the deal's collapse is announced but maybe he wants to have things in place before that happens.
CEOs of large companies that are forced out during acquisitions often fail upward. It really depends on how they behave right before the close. Effectively, the CEO has to advocate for the company and get the most out of the acquisition, and if they do, they are often rewarded (with seats on board or choice of next job). realistically, he will be able to retire for life after this if he chooses, and will be able to select a job offer that works well for him.
I'd consider myself easily bored, but I think $42 million would give me plenty of novel ways to entertain myself. (I definitely would _not_ want to run a large corporation though, so I guess it's a good thing I'd never get hired for one of these jobs anyways)
Hell, even if you managed a year or two, you’re still walking away with tens of millions that’s pretty close to financial security for the rest of your life.
I think there's a part of the HN population that has delusions of becoming billionaires one day, so they talk about tens of millions like it's not much. They'll likely never have either.
Financial security in the Bay Area requires a house there ($2-3M, nowadays) plus $COST_OF_LIVING/4%. This is easily $5M net worth. It's in "two Googlers and a successful exit at some point earlier" territory.
Granted, this threshold is less than $10M, but it isn't orders of magnitude less
All of which is to say that it is basically impossible to stay in the Bay long-term unless you make an absolute fuckton of money.
Well, you do have two other options.
One is to commute in 2hr or more every day. Which a lot of service workers have to do.
The other is to share a house or apartment with roommates (if you're single) or with another family (surprisingly common, because what else can you do?).
These are both lifestyle decisions that differ substantially from what most people think of as "normal", past your 20s.
What I'm saying is, merely living a "normal middle class" lifestyle in the Bay requires absurd money. So I can understand why people act like absurd money is normal.
You don't need $5M to be "safe" in the Bay Area. You do need some money - enough to afford to get a mortgage on a place to stay - but once you get past that, things get easier. The thing is, it takes money to start making money. It takes money to start to be able to afford the things that will make your cost of living go down. It does suck, but it's not $5M.
If you put $5M in index funds, you’d grow it by about $400k a year (8%) on average, to start. It’s hard to imagine going broke with that by doing “normal middle class” things. For added security, one could add in a part-time job.
8% is extremely optimistic. 4% is more like it, maybe even 3.5%. I'll use 4% for what follows. That's $200k. Take out 20% LTCG, now you're at $160k.
Rent is like $3k/mo, so $36k/yr. Say you have modest living expenses of another $34k/yr. Now you're at $70k/yr to break even. That leaves you with $90k to save/compound.
So, ok, you're doing very well as a renter with $5M invested, even in the Bay Area. And, given that you have more than twice the income you need, you'd probably be ok with only $2-2.5M. As in, breaking even with passive income.
Which would work so long as you don't want to own a house, and so long as markets don't melt down. That extra security seems to cost extra.
Sure, but if you retired in 1997 to live off the interest on an investment in the S&P 500, by 2008 you'd have made an annual return of... 0%.
If you used cromd's figures of $5M in funds and lifestyle expenses of $400k/year you'd have spent ~80% of the principal (although you'd probably have reigned in your spending unless you were mad)
A boat doesn't just need to survive the harbour's average water level - it needs to survive low tide and high tide.
4% is the historical number you could take out for expenses in the worst case scenario. IMO it’s not pricing in modern existential threats, such as a war that crosses the ocean, or existing regulatory differences that make it more difficult for larger firms.
Yeah, maybe 4% is all one could manage to withdraw to survive the longest downturns. I haven't dug into that much. But, people are maybe debating different things - some are likely talking complete early retirement whereas my comment was more about "financial security" (or at least the claim it's "basically impossible to stay in the Bay long-term unless you make an absolute fuckton of money").
For me, financial security means something more like: money will be low on my list of problems. I could get more money by turning my attention there. I might have to work, but it could be some low-stress job, and losing it isn't a big deal. I could afford extra care for an elderly parent. I won't be knocked out by most random things that pop up, specific to my personal life, though I can't control what happens to my country etc.
For some, it means they don't have to work at all, and can't be ruined by market downturns that last decades. And further for some others, it means they can survive wars and societal collapse.
I think both are valid to wish for, though at a certain point it's a burden on yourself to control things you can't control. If there's a 1.1% chance of widespread nuclear war in our lifetime, and you want to be 99% certain your lifestyle won't take a hit, one needs to save and spend a ton to be able to weather it all.
I used to work in car sales in the bay area. Basically every car salesman and every mechanic at a franchise car dealership owns a home. Maybe they drive 30-75 minutes to work, but they are 25-35 and own a home in California. The older ones own a home within 15 minutes of their job.
That they bought themselves? What's the cheapest home available within an Hour of SF, 500k or more? Do you really think a car salesman barely pushing 100k a year can swing that? Or are you implying that car salesman in the Bay are making top 1% salaries?
I wasn't talking about car salesman that work in SF proper. Yes, 1 hour from there is basically still pretty expensive. But if you can work anywhere 30 minutes outside SF, and then live another 45 further, you own a home.
And yes any decent car salesperson is making $100k. I made on average $250k but I was a bit better than top 1%, and I know a few that made more. I suppose you could say I only socialize with high performers. Sure every car dealer also has a few people that struggle to pay their apartment rent.
The industry is setup for an good salesperson to support a family. If you can outperform average by 2x, which is possible if you're really on it, you can make 2x+ that amount.
Same applies to mechanics that are good at their craft.
Come on, do some math on this. Any engineer at FAANG, even excluding their stock grants, will probably have close to 10M in retirement accounts by the time they retire given max contributions and historical returns.
Most people spend proportionally to what they earn, so I don't see why one year salary should necessarily provide the lifetime of financial security, regardless of what that salary is.
But it’s a bit ridiculous to get 42 million USD and not be satisfied. And the original comment is ridiculous to suggest that it’s not sufficient compensation.
If your salary was $25k/year (a respectable amount for the majority of world population), would $1M seem like a lifetime financial stability? I think so. Yet if your salary is $250k/year, it probably wouldn't, and this would sound ridiculous to people who make $25k/year.
If you make 25k/year getting 1M is almost as good as getting 42M, because you are not used to thinking about anything you can do with 42M that you can't do with 1M. However, if your salary has been 10M/year, you most likely can easily see many ways to spend 42M, which are not something you think about often when you make 250k/year.
Most people on $250k are just trying to “survive” (as in, have a house and a family) in a high cost-of-living area. If a house costs $2M then $250k is only just sufficient after deducting taxes and living expenses. Their spending is not so different from someone earning $25k in a low cost-of-living area.
There’s nowhere in the world where the cost of living requires $10M/year. To spend that much money you are forced to spend it on high-end luxuries. Of course there are people who could easily consume that amount of money, but most people on that income would put it into investment instead of consumption.
Financial freedom is supposed to cover more than just some standard "cost of living" in a given area. It should let you maintain your lifestyle without having to work for it. Maintaining the lifestyle includes keeping your spending habits, so if you have been spending 10M/year, then achieving financial freedom would mean you can keep spending that much for the rest of your life.
It's a different question how many people actually spend 10M/year - I have no data about that, but I can easily see myself spending that much if my income has been 40M/year for several years. To me personally spending that money would not necessarily mean buying some high-end luxuries. It would probably involve trying to make some changes in the world and influence things. But yes, luxuries and interesting experiences too. If you're interested in this question, try finding more information about lives of famous rich people.
Depends on the people. If you want to be safe to retire early, it is a good idea to keep living humbly while you are making a lot of mone and not adopt the Jet Set life.
I've seen example of people selling their company, retiring early and stay low-mid budget. One particular example is very wealthy but live in a small house, drive a 10y old compact hatchback car. You wouldn't know his fortune just by looking at his habits. He enjoy more a BBQ with his neighbors than going to expensive places to eat and help around when someone in the village needs an additional hand. He is still probably spending a lot more than I do traveling on holidays and he has nicer furnitures but he is still doing it like most people do, only a few weeks a year when the kids are out of school. What he has is the ability to justify buying expensive but sturdy stuff that last, instead of things that break and have to be replaced on a regular basis.
There comes a point where it becomes increasingly difficult to "spend what you earn." I mean, you can do it with dedicated effort, of course, but even if you're very in-the-bubble, it's hard to think of buying ultra-expensive commodities (boats, art, highly expensive cars), or your third or fourth house, or other things that can plausibly eat up tens of millions of dollars in a year, in the same category as, like, "Well of course I want to send my children to a swanky private school instead of public."
Oh I agree 100%, personally it’s more money than I’d know what to do with, but I’m also aware that there’s a chunk of users here who’s respond with “well after tax this that, etc etc” with some justification as to why it’s not quite enough, so I thought I’d attempt to cover all bases hahaha.
I'm always curious .. how do these execs negotiate such contracts (where contingencies like getting acquired/fired lead to a payoff). Does this start at the VP or EVP level? I assume there are professionals/lawyers involved in the contract part (representing the exec I mean)?
Smaller orgs VP level. Larger EVP. You almost always retain a lawyer to review these things. Change in control is a very common trigger for a lot of things in most employment contracts of this nature. The downside is you end up with much more ironclad covenants and restrictions. But your comp is often at a FU level if you do get fired so it balances most of the time.
I'd recommend reading "Barbarians at the gate". It will give you a very good idea.
When it comes to levels, those kind of golden parachutes are offered only at top levels. VPs, SVPs, etc. are help and get normal packages when they leave, at least in normal, large blue chip companies.
$42 million is a pittance for a man at his level. VCs with a tenth of the risk have taken home more money than that over the years from several deals. He has also been at the company for a very long time. I’d be enraged at a $42 million exit when I’m a child prodigy who has worked his ass off to finally helm one of the most publicly visibly corporations on the planet.
Most child prodigies and most people that work their ass off don't become millionaires, much less ones that can earn a million a year from interest. Also he did receive compensation for all the years he worked, no?
Why are you being intentionally dense? Compensation in the valley comes in the form of stock options more than anything else. This is like saying someone slightly less consequential to google than Jeff dean or Sanjay ghemawat should be happy with $50 million for giving a large portion of their lives to the company. Are you guys smoking something?
Most child prodigies don’t even work in corporate America and a lot of them don’t care for wealth. They’d rather go into theoretical physics or pure math.
Huh, it's just a job even at position of CEO. To think he has taken risk while doing his well paid job is freaking hilarious. He did not build the company,nor is he some A level tech celebrity. So 42 million is BIG FUCKING DEAL.
Yeah I was like, wtf is GP talking about this guy is an employee who climbed from SEng to 42m exit in a decade. At no point was he even remotely close to missing a credit card payment; what a sweet deal he's set for life now.
You need more than that if you want to set up a steelworks or a silicon fab. I understand that you probably mean no human being needs $42 million in pocket money to spend on gigantic houses and medium-sized yachts, but c'mon.
The initial ideal of capitalism is, the people who make good decisions capitalize more “decision power” (=money) because it will be good for the future economy to concentrate power in their hands. Those who hold power are the best ones.
It’s just a fun theoretical thought exercise, in which there’s no limit to how much one would accumulate, if their decision making is good to the infinite. He didn’t tank Twitter into the ground, therefore he deserves a good share. In practice, they use this money for themselves instead of reinvesting it into other endeavours.
not almost nothing. He's a bit of a tackling dummy at this point. That being said, he's the world's best paid tackling dummy. Even if Musk purchase does not go through, not sure how he stays as the board basically said when they agreed to Musk's offer we have no current plans to create anywhere near the value Musk says he can.
There's a possible difference here between "doing things that Twitter and its owner(s) will profit from" and "doing things as Musks wants them". If the two diverge, the first is the winning strategy, burning far fewer bridges than the alternative.
If it's unclear, people who don't particularly care for Musk (aka people who know Musk minus people who want to be Musk) may well start from the assumption that the current CEO was right. And if Musk-era Twitter doesn't succeed as wildly as some (one) person predicts, they stand to look even better in contrast.
I'm not saying that Musk will necessary fail––he's had quite a bit of success compared to, well, anybody. But he's been involved with a few duds, as well, and has set rather high expectations. It's an almost classic case of decision-making under uncertainty and I'd guess a Twitter CEO has seen a relevant case study or two.
I worked at a big company that was being acquired. The bigger acquiring company needed our company to sell off some divisions to avoid regulatory issues. So we were in this "going to be acquired.. one day" phase for like 18 months.
In the meantime our company actually had to tell the a subsidiary of bigger acquiring company.... to sort of shove off on a partnership we had with them.
This subsidiary was crap and they were not holding up their end of the partnership. It was reiterated many times that "while we will likely be acquired by their parent company our job is to operate in the interest of our current stockholders and that best interest is to no longer work with <subsidiary>".
No word if the acquiring company ever responded negatively. By all accounts they understood (and really had a bigger picture in mind).
My own guess is that this is doubtful that Musk drove this.
That said, he is a very large shareholder already, and so if he, as a large shareholder, communicated something to the board, and they acted, then the claim that isn't kosher rings a bit hollow - large shareholders communicate with boards and some activist ones go further.
Internally I suspect there is some concern about Musk. The head of legal was reportedly crying regarding this buyout. They've got their misinformation management efforts around the biden laptop story and other issues (vaccines etc etc) that musk may not back as fully as Gadde did. So they could be moving some deck chairs in advance of Musks arrival. Be interesting to see how it shakes out, may not be smooth - Twitter is HQ'ed in San Francisco.
There are far more possibilities than those two. Here's just one off the top of my head (I assign no probabilities here, just pointing out this false binary): This person is being fired as a result of some investigation or process that began prior to the acquisition process and whose results have only just been reached. There are a whole range of process driving, "my hands are tied" scenarios that could explain this.
Another would be that this person was doing something that could derail the deal (deliberately or not), and the CEO felt the best thing to do was to protect the deal by firing him. Given that he's on paternity leave, and "Parag asked me to leave after letting me know that he wants to take the team in a different direction", that doesn't seem likely.
Although if you were fired after being investigated and the company is keeping it quiet, then surely going with the standard "spend some time with the family excuse" and keeping it quiet rather than drawing attention to that fact would be basic self preservation.
> So there's two options right - the first is that Parag is for some reason making big strategic decisions about the direction of the company despite the fact that we all know he'll be gone if the deal closes. Or he's making big strategic changes at the behest of the acquirers before the deal closes.
It's conceivable that he already had a backlog of changes in his mind that he wanted to do at some point, sooner or later. But due to acquisition coming, sooner or later has turned into now or never.
If he legitimately believed these changes were best for the company before, he might still believe so.
In other words, yes, there's a reason, but not necessarily a nefarious one. It could be, or maybe it's as innocuous as urgency.
Also my first thought - you'll probably get a better severance from your long-time coworker than the new guy who came in with the stated belief you've done everything wrong.
I think there's also the possibility that Parag is vying to keep his job as CEO, and so he's trying to guess what he thinks will impress Musk, and executing on it while he's still in charge.
What about the possibility guy was going to be asked to leave regardless of recent events, but the executive team decided the least they could do after he put in good time is allow him to collect some PTO on parental leave before handing him the official pink slip? I don't know what Twitter's benefits are but I imagine they have an, "unlimited leave" policy. Could be they've disagreed for a while and an argument came to an affront similar to, "Look man, I'm going to take leave to spend time with my new child, then we'll decide if it's the right move for me to return." Frankly this is a pretty boring conspiracy regardless, people leave jobs all the time. All I have to say is I hope dude enjoys a nice Summer with his family without worrying about this dumb product that for the most part narcissists use to trick themselves into thinking anybody gives a shit about what they have to say.
Others provided a bunch of alternative options. I'll throw another one in the mix. Parag has been a CEO a few short months. If he's about to be out, he won't have much to show for his time. Bold moves now can show potential future boards of directors that he has what it takes to take on this role elsewhere.
Isn’t there usually some sort of removing of the skeletons from the closets before a deal closes? Yahoo revealed there massive data breach while
their deal was closing and such.
Fourth option is that the deal doesn't go through. Deals fail to go through all the time. If you just sit around and the deal doesn't go through you're fucked. The CEO's job is to manage the company as though the deal won't go through, until it actually closes.
There's a third option, which is that Parag is doing what he things is in the best interests if the company under the circumstances.
Because regardless if whether the acquisition falls through or not, this whole thing has underscored the need for changes at Twitter. The top two execs may need to go in order to move forward no matter what.
Your options are reasonable guesses as well, just not the only two possibilities.
Imo mostly likely scenario is they’re removing evidence / firing people as if the evidence is discovered.
If you saw their prior earnings they were over reporting by at least a million users. The people they fired would have potentially known that, or at the very least should have.
Further, due diligence will be done prior to sale. At which point items such as the above can / will be discovered.
Finally, there have been a lot of political decisions made by Twitter (banning a sitting president, etc). If that was done at the behest of government (as some claim) or advertisers (others claim). The result is the same, they made a decision which strategically let Trump start a competing and growing platform. Not good for business.
In any case, I suspect that’s the reason for firing.
> Twitter deal temporarily on hold. Elon Musk wants to evaluate if spam and fake accounts do indeed represent less than 5% of the platform's users base.
> On the other hand, going rogue and making big strategic decisions about the company
Parag isn't a strong character like that. He's someone who plays by the rules and only says empty conventional things, without any personal opinion or feeling, couched in formal modern US corporate/tech language, with the required progressive veneer. I'm pretty sure he only thinks things along similar lines.
Not weird that he's doing things at behest of Musk which I think is likely. It may be part of acquisition agreement either implicitly or explicitly. Musk most likely has people he knows in company (he is friends with Jack) that are advising him and suggesting changes. Much easier to oust top execs before coming in then later.
> It also seems weird for Musk to already have the insight into the company to know specifically who to fire
If in his viewpoint (he wouldn't be alone thinking so) Twitter recently became less appealing - booting the Lead of Consumer Product team seems perfectly reasonable to me.
Despite "we know he'll be gone" Parag may as well want to try to keep his chair when Elon takes over and is making changes that would be favored by the new leadership. And if the deal doesn't pass - firing the team leads (possibly) responsible for company's recent bad press and maybe Elon's move itself seems justified.
Seriously? Having been on both sides of a number of acquisitions I can tell you that these kinds of personnel changes are made typically at the (possibly indirect) request of the acquiring company. Things like "We've got a really create CMO that we're bringing on, we don't need any headwinds to them getting traction quickly" means "Get rid of the people who think they are in charge of marketing so that our person can set the table they want to set it." Or, "Some of our team is uncomfortable with Bob in the role he's in, he just doesn't seem like a good fit you know?" or any number of ways to communicate what executives they want moved out so that there will be spaces to be filled when the new team moves in.
And in a deal like this where there is no "plan B" the CEO's exit compensation is entirely predicated on their ability to "set the table" well for the incoming executive team. So yeah, Parag is doing what Musk or Musk's team told him need to be done prior to starting there, and if he told them he wouldn't do it then no big package for him.
I understand the 'normally' part as in "this is how it should be done." And yet in the roughly ten or so acquisitions I've been on the "inside" for (which is to say was at one of the two companies and was related either peripherally or intimately in the transaction from start to finish), every single one of them had some executive shuffling (aka separating) prior to the close.
Clearly, it is biased to Silicon Valley and my experience is probably different than someone who worked in non-tech companies, but if I put it into a rule of sorts I'd say; During a fund raising round executive positions are the most secure and individual contributors the least, during an acquisition these are reversed.
Look at the tweets of these guys a few months back. Both have several positive mentions of Tesla, Starlink and/or Musk himself. They may actually be Musk fanboys....
It may be that they are fired because Parag and the other leaders are concerned they will (or have already) share(d) information or otherwise cooperate(d) with Musk in ways Parag wants to prevent.
Third possibility is getting Musk to withdraw his offer. The article comments on missed intermediate growth targets. Musk has put the deal on holding pending proof that the user count is not inflated by fake accounts. So I see this all as an attempt by Parag to "save" the company from Musk and his goal to make it an open "free speech" platform.
There is also a simple possibility that these two executives would have been fired anyway. Average executive tenior at a company is only about 4 years, and executives leave or are asked to leave pretty frequently.
As for the hiring freeze, new funding sources are essentially cut off until the purchase either goes through or officially fails. New loans or lines of credit requests are likely to be reject due to the uncertainty around whether Twitter will be acquired or not, and addition sales of stock would be seen as a bad faith act because it would essentially lose the company funding if the sale goes through. Increased spending could cause liquidity issues for Twitter for this reason. It is a known fact that Twitter is not a particularly profitable business, and given all of these facts those executives may have been let go purely for financial reasons.
Trying to read into this without more knowledge regarding internal motivations is purely speculative and cannot provide reliable information. What's more, every major company would be aware of these likely motivations and would see his actions as ordinary under the circumstances even if it turns out his motivation was to keep Musk from having access to those employees.
In short, there would have be extremely compelling evidence of intentional malfeasance for this to impact his reputation or future career prospects any more than Musk acquiring Twitter.
If he was fired on paternity leave, the credited play is to say nothing. This is potentially a beautiful lawsuit and the last thing you want to do is lose ground on something you said on the internet.
If he's fired now the current board can offer him a severance package that may not be on the table once Elon takes over. Might be a good thing, or strategic?
This is the correct answer, Elon will not be as generous when cutting numbers.
I'll never forget letting go of staff in France and Italy. The employees were overjoyed we were letting them go and got into fights over who would be taking the packages. I learned that they received 1 year of salary upfront tax free with a bunch of additional benefits to help with job training and placement.
An average middle manager friend has had this happen 3 times, each time after a US acquisition. He now has a chateau in the south of france and is very happy with himself.
Why wouldn't it be? The sale hasn't finalized, so unless there's evidence that they're intentionally harming the company they can continue to operate as usual.
Severance packages are usually a deal: company pays you $X, and you agree to say (or not say) certain things, and also agree where you might work in the future (i.e. not at a competitor). The current board/CEO may want to keep things stable, and offer generous money to keep things on an even keel; Elon may not care what a former executive says or does.
Without knowing details of the severance, non-compete clauses, etc., it is hard to read too much into this. It could be a giant favor, or a giant kick in the balls.
Growing up outside of the US, I feel kinda cringed when he said he was "INSANELY proud of our collective teams achieved". Such an interesting cultural difference.
I grew up in the US, and I also found that odd. Not unprecedented, but odd. The literal interpretation of that statement might be more justifiable than the one he meant...
I also believe there would also be a large segment of the US that finds these "job-finding/bragging echo chamber" Twitter posts cringeworthy regardless of context. They appear oddly performative and obligatory. Stay tuned for the follow up "I'm incredibly excited to announce that today I am joining ___" post.
The cultural difference doesn't seem like something to "cringe" over. I also don't think the hyperbolic use is restricted to the US. Pretty much any english speaking country will use "insane" to describe something with emphasis. Certainly normal in the UK and Australia.
> I also don't think the hyperbolic use is restricted to the US.
Strictly restricted? Of course not. But for what it's worth I've been told by numerous Europeans that they perceive casually throwing around extreme hyperbole to be characteristically American behavior. I guess it goes with waitresses pretending to love you.
I will expect more people to mock this decade of extreme marketingspeak that was funded with fake money and fat investor pockets. The people doing the mocking will lead the next wave of tech growth
This quirk of dialect should be called the California Superlative.
Everything is awesome, amazing, radical, insane, great, gnarly, not to mention sick, ill, righteous, dope. Californians just love superlatives, use them constantly, wear them out, and need new ones.
This spreads like a fine coating of mold over the rest of the country before going on to annoy the Commonwealth, and then we repeat. It's pretty cool.
Good point, and the place of hella in the dialect is hella distinctive, because it's a superlative modifier: hella sick, hella insane, "I just bought hella strawberries at the market", and so on.
So you have a politeness continuum from very, to hecka, to hella, to fuckin'. Which is dank.
It really seems to me that in American English, every word eventually gets watered down to mean either "good," "bad," or "very." Take the word "terrific" for example. It used to have connotations of terror. Now it's just another synonym for "excellent." Or "fantastic," the old meaning of which is still found in the related "fantastical," but now simply means "very good." Or "incredible," which used to mean "not believable." I could go on.
And when every superlative has been watered down like this, you need to pick a word that's completely over the top to express anything with any strength of feeling. It's good, it's great, it's awesome! It's fantastic! It's incredible!! It's insanely unbelievably wonderful!!!
"Insanely" is just the latest entry in our internal linguistic arms race.
Yep, and people using "absolutely" all the time is the crown jewel.
In the past few years there's been a similar but opposite degradation: the only adverbs anyone uses are "super", "super not", and "not super". I think it came from the infantilized condescending culture on Twitter.
I agree with the other replies about California Superlative in general, but at least in German it would not be weird for some corporate bro to say he was "WAHNSINNIG stolz..." which means exactly the same thing.
> I'm proud that we changed the perception around Twitter’s pace of innovation, and proud that we shifted the culture internally to make bigger bets, move faster, and eliminate sacred cows.
998 comments
[ 4.2 ms ] story [ 350 ms ] thread> Parag is on his way out too. Why is he firing his product leaders during his lame-duck period?
https://twitter.com/CaseyNewton/status/1524790595968901122
Or at least, that would be a good explanation if we weren't talking about Musk.
With that track record, one must assume his head will be one of the first on the chopping block.
Also, he was recently promoted to CEO, which would be strange if the common opinion at Twitter was that he failed as a CTO.
That we can see. Either the entire leadership is stupid and promoted a dud, or maybe there's more going on than meets the eye?
In the enterprise, if someone high ranking is going to be replaced, they're never fired unless there was company-hostile bad behavior.
If the organization is trying to move in another direction, they reorganize and reduce the role of that high ranking leader- maybe to a position where they're alone! and give that high ranking person time to make their next move comfortably.
This goes double when the person is on leave.
What? Perhaps in shitty companies that are incapable of making tough decisions, but this is definitely not my experience.
On the contrary, for most cases I don't think there is much "shame" for being fired as a senior exec because a lot of times it's just that there are disagreements among senior leadership about where to take the company, and so it's better to have people leave who aren't on board with the company direction than to have those disagreements fester.
> the enterprise
At least now the guy can 'extend' his paternity leave freely.
Seems you could do with a little more George Carlin in your system. He fucking loved America....apart from the shitty bits that the rest of the world agrees with him about.
ICs follow the lead that executives set. A chilling effect like this will cause folks who most _need_ the leave — single parents, people with family in need of care, or those struggling with their own health issues — to second-guess their choice, while those who can just walk away w/o any real risk can go ahead and try taking time away.
It also puts the lie to the idea that employer-subsidized leave beyond the federally-protected time window is an entitlement rather than an easily-canceled perk. We all know that rationally, but a BigCo obviously exploiting that trust is a good reminder that the company (any company) is not there to help you, they are not your family, and you have to be ready for this kind of “switcharoo” whenever the numbers (or politics) justify it.
It is my experience that people taking time off to be parents also take time off from the machinations that will lead getting promoted (at certain levels), thus hampering their advancement, but they are usually not fired, in tech anyway. Now the treatment of women, who already get a pretty bad deal even if they aren't mothers, is another matter altogether...
A business can't just stop because someone is on leave. I would expect them to be treated fairly, and the same as if they were not on leave when it comes to personnel decisions. What would not be fair, to both the employee and all of their colleagues, is to say that when someone goes on leave that there is a moratorium on any changes to their status for 5 months.
This sends a horrifying message to employees.
> This sends a horrifying message to employees.
Yeah, as someone without kids, your proposal certainly sends a horrifying message to me.
The message should be just as horrifying whether or not you have kids. The message is: “We made a commitment about your terms of employment. We are willing to break that promise openly and publicly with one of our leaders. Do you think we won’t do it to you?”
Anyone at twitter right now should see this as a red flag at a time when everything is in flux.
Management is in chaos in the middle of a politically contentious buyout, and doing things like firing people on parental leave that will necessarily read badly in the press.
If I were at twitter right now I would be getting everything in writing, and lining up a new job that starts the day my RSUs go liquid.
Yes, its true, legally you can not, and should not, be penalized for taking parental leave (a point I made in my original post). At the same time, you should not get some guarantee that because you are on leave you can't be treated the same as if you were working.
If this guy would have been fired had he been working, a parental leave doesn't act like some sort of "get out of jail free" card.
That's strange, I always thought that the point of it was to allow parents to spend much needed time with their newborn child.
The ‘benefit’ part is that you get your job back after a few months.
Don't be fooled - the guy is quite rich.
I think he'll be able to weather the financial impact of a recession and having a kid.
[0] Note that this is Twitter only, and wouldn't include any other form of diversified holdings.
A) spend paternity leave enjoying your newborn, but in the second half gearing up and remotivating to go back to work, getting back to work and being let go with a “we didn’t want to dismiss you while you were gone, thanks for coming back, here’s the door”
vs
B) you’re on paternity leave and the company lets you go, but still your leave is fulfilled (I.e you get the payout and time off). Now, instead of investing energy on the return to work, you can just move on with a “best to quit while your having fun” attitude.
I fully support paternal leave. As a father of four who despairs at a fatherless world around me, anything we can do to strengthen fathers (and equally mothers) is a great thing.
But there is a sad reality to extended leaves as well. We hire people with 6 month probationary periods, but rarely are people filtered by this. But I have been in meetings where a person on extended leave (medical, parental, whatever) and it becomes group apparent that the individual hasn’t been missed for a variety of reasons, and the consensus emerges that this “individual not being here” is actually a net win for the company and its aspirations. Do we know that that’s not what happened in this case?
Remember, “My Job” is an oxymoron.
Psychological effects notwithstanding
I’ve accrued some experience with newborns. It’s a very tired time at times. It’s a time of wonderment. Especially with your first, it’s surreal, after 2 weeks you can barely remember “what was life like before this again?” But despite its otherworldliness, it’s also a lot of downtime. It’s different than normal downtime, because you’re tied to this growing little life, but it’s there. And I did indicate that it is in the latter half where having this project to work on would be ideal. Guess that’s just me and apologies if that seems insensitive. It worked for me.
For all the hype AI/recommendations algorithms get I don't think it works well on a platform where you already choose who to follow.
Otherwise I've always wondered what the thousand Twitter employees do besides keeping the site running and advertising sales/development. Although I've never worked at a giant tech company before.
Yes, there is COBRA and he is probably doing just fine financially, but significant unplanned changes in income/costs are never fun
I assure you, my guy isn't worried about COBRA.
Edi: Kayvon says he was "asked to leave" which is not the same as fired.
The sheer amount of equity, cash and packaging going into Kayvon's severance is going to be princely. Additionally, he's a founder of periscopeco, so he's not without direction.
It's pretty hilarious to see the pearl clutching of techno-bourgeoisie over something like this, pretending other tech-lords are getting mistreated over some supposed breach of decorum. The mere fact that he gets to take parental leave puts him head and shoulders above most workers in the country.
Parental leave, high salary, severance... where do I sign up for some of this "truly awful" treatment?
People can disagree on whether paternity leave is a good, bad, or indifferent thing, but it didn't even exist as a concept for most of humanity's existence in an official capacity. It went from being an idea, to a right, to something roughly comparable to "fired while undergoing chemotherapy" in a generation. It's odd.
I assume it's yet another consequence of social media's effect on culture: being as hysterical as possible has suddenly become heavily rewarded. The downstream effects on broader political culture (and culture in general) are utterly fascinating to me.
HN: "Firing a millionaire on paternity leave—and by "firing" I mean continuing to pay for the rest of their leave, plus probably a bunch of severance—is horrible!"
99% of the rest of the US: "WTF is paternity leave? Is that when your boss generously lets you use some of your annual leave for part of the week in which your kid is born?"
- Welcomed a new child into the family in the past 12 months through birth.
- Paid into State Disability Insurance (noted as "CASDI" on most paystubs) in the past 5 to 18 months.
- Not taken the maximum eight weeks of PFL in the past 12 months
Insinuating that 99% of the US lacks paternity leave is disingenuous.
These are people that get taxed at 55% (top california income + top federal income + additional taxes). Not the ones with multiple orders of magnitude more money that get taxed at 4%.
Their boat is so similar that its embarrassing for you to fall for the division.
Sticks, stones. I'm rubber, you're glue. Et c.
I'm well aware of the problem of false divisions distracting from the very real and much more important class war, but the level of concern on this one's still kinda silly, considering the broader context. Besides, I'm with the faction that'd rather get this news during paternal leave, than on the first week, or even month, back. Provided any pay for the leave—assuming at least some portion of it was paid—continued, anyway, which I expect it will unless they really want to risk a lawsuit for little benefit.
Since income taxes are graduated, there is literally no one that pays 55%. Instead, you just approach that rate as your income rises (and never reach it since your front income is taxed at lower rates).
you can have many dollars at the top tax rate. wouldn’t recommend.
I would say that in the US labor market having no job security is the norm rather than the exception, so it seems peculiar to couch it as "part of the trade you make for gigantic compensation".
Companies are having to hold the line on what we value in this country, as legislation from environmental to health is not keeping up.
Twitter is specifically of note because the CEO recently had a child and rightfully took paid leave himself.
Whatever your personal opinions are on Elon Musk, he is very influential.
The man has six children and a varying track record on how he has communicated his views and personal use of parental leave and the role of the father following the birth of a child.
https://mobile.twitter.com/elonmusk/status/59806585473604403...
https://www.theguardian.com/commentisfree/2021/dec/12/elon-m...
The culture and policy Twitter matters. It doesn’t matter if the individual experience is that a janitor or senior management.
- Part of the deal with being an executive is no job security. It's part of the trade you make for gigantic compensation.
- What would be preferred, firing him the first day he's back?
This is the case in any at will hire.
> It's part of the trade you make for gigantic compensation.
This trade is made by people regardless of the compensation amount.
> - What would be preferred, firing him the first day he's back?
Yes, optics matter and it would send a better message and set a better example.
Does Bottomless offer parental leave?
I thought the comp packages were more in the single digit millions range for these folks, and stock oriented. My guess is they've taken bigger losses on just the general stock market decline than most, though for those who hold twitter I personally think Elon is wildly overpaying (as usual, see solar city) and they will make out like bandits as a result there.
That guy combining with his wife is worth 70-100m range.
His startups with like 10 people was acquired by twitter for 100m.
I don't see any issue firing them during paternity leave.
Obviously not fire in any way related to parental leave, but if it's to be counted as work then it should be consistent.
You can't, and shouldn't, be fired for taking leave, bit obviously there are a million and 1 reasons for there to be changes in Twitter's exec leadership given what's happened over the past month.
I've seen normal employees take such leave, only return to find others have taken over their work, and by all means they are no longer needed and they have start working their way into the team all over again.
Paternity leave is more or less a kind of paid short term temporary severance already. Sometimes the company does make it permanent.
If you are gone for weeks/months and no one feels any difference, then sometimes its an indication you were never needed at the first place.
https://twitter.com/mikeisaac/status/1524793136051986434
https://www.nytimes.com/2022/05/12/technology/two-twitter-le...
Tweeps? Is that really a term of endearment they refer to each other as? Really?
Is this a thing most people refer to other employees as most of the time? No, but it helps corporate create an image of a fun, playful workplace. I think it's utter bullshit, but you know, to each their own.
It’s like peeps, but more Facebook-y
Nah, all of these corporate 'pet names' are applied unilaterally, by the executives to the workers. Condescension is the point. The application of such a nickname is a show of power, meant to remind workers of their place in the system.
If your culture involves calling me anything other than an "employee", I'm not a fan. Personally, I will always think of myself as a "Mercenary" regardless of who's signing my checks currently.
Having said that, firing someone on paternity leave is terrible and would be rightly illegal in many countries.
She is great at her job so we have no reason to think she would have otherwise been laid off. But plenty of people who were great at their jobs got laid off due to Covid. So it’s hard not to wonder.
It’s that he was fired when he happened to be on paternity leave.
But at the end of the day, isn’t it another form of paid leave?
So if he was paid out in advance for that time off would that fulfill the company’s obligations?
Genuinely asking, I am neutral on this since I don’t know the intents involved.
https://www.npr.org/sections/goatsandsoda/2018/06/14/6196042...
if your boss or board wants numbers, no product will ever end up good, no matter the people in the product teem
Pair that with their actual consumer product being a chaotic scattergun of failed sub-projects, terrible client UI relaunches and the apparent inability to ship anything meaningful given years of time and resources and frankly if I was a large enough investor I'd have been wanting wholesale firings and reorganisation years ago.
If he was paid through it, which I would assume-- any kind of senior dismissal will come with months of severance, what would the problem be?
Well, for one: PR at a critical time, obviously.
And, general employee morale.
I'm a systems guy. I'm into straight up logic. Emotional intelligence scares and confuses me.
A low level IC would not be called while on leave to be fired. But when the company needs a change of excecutive leadership, they aren’t going to wait months because you had a baby. I’m sure he’s being paid through the end of his leave period and besides is compensated in the millions.
Absolutely toxic workplace.
or better yet, use Nitter
The deal can still fall apart for a number of reasons. The risk of this happening is far from remote. This is evident from the current stock price of about $46, which is significantly lower than the $54.20 Musk is offering.
As far as I recall, they agreed on a break fee of ~$1bn if Musk walks away. But if he can lower the price to $40 a share (which is still far higher than market would probably be, at least in this market), he gets Twitter at $31bn instead of $42bn.
Right now it's down 26% this month, more than twice the general market drop, and shows no sign of slowing.
Musk has already started trying to ditch the margin loan.
With that in mind, special situations are clearly still a valid strategy.
That's why the price is never on parity.
Putting everything on hold until the merger closes is a severe dereliction of duty.
If you're 100% sure the deal goes through then that's essentially a free 6$ per share guaranteed right now.
EDIT: Actually it could go higher because of people covering cash-covered calls that are exercised or closing shorts that existed before the announcement - see below.
--
It looks like Twitter actually did go higher then 54.20 on April 5th to 54.57~54.92 [1]
The reason why it did IRL is several factors. One is speculation it could go higher due to volatility/inefficiencies. The biggest reason is most likely hedging against sold call options and closing short positions - which are both essentially positions that the deal won't go through. If somebody sold a share of twitter for 50$ thinking it would go back down but now wants out of the position they must buy the share which increases buying pressure and thus the price. Similarly if somebody sold a cash covered call and is exercised or hedge against it to limit losses they must buy shares at the current price (which is 100x per option). Again this increases buying pressure and thus the share price.
I swear there's a few other reasons I can't think of right now. It's basically from market inefficiency factors. Speculation (of the share value not future company value per-se) and hedging are the main ones in this case. In non-acquisition scenarios other factors include portfolio rebalancing, margin-calls, market orders, and poor order-book liquidity.
[1] I'm seeing different numbers from different sources but they're all around there - I'm not sure if they used sale price or the quote price etc, quoting a stock is a whole can of worms in itself.
Disclaimer: I can't claim to be any type of expert - some of this may be incorrect, and I'm a bit rusty
Musk loves attention, but dumping his Tesla holdings to keep getting it may be too much for him.
Knowing Musks shenaningans, it's likely he wanted to sell his Twitter stock but wanted to pump it first with a semi-formal offer. Same he did with Crypto/Tesla.
Not surprising that Twitter board would call the bluff. Even if Musk tries to renegotiate to save face, the Twitter board will look better to shareholders by saying no to even lower offers.
Baseball fans know of Wally Pipp, who was a solid first baseman for the Yankees for a decade or so. One day Pipp had a headache and was replaced in the lineup by a young Lou Gehrig, who turned out to be one of the greatest hitters in baseball history.
I have no idea if Jay Sullivan is a Lou Gehrig talent, but he's been doing the job while Beykpour is on paternity leave. If you're the CEO of Twitter and you believe the temp guy is doing a better job, why not make the change?
Well, it's a big lawsuit, for one thing. Firing someone on paternity leave is not a great plan in the US.
At this level, a company may just accept that as a cost of doing business. But this is at least an answer to your question.
https://mobile.twitter.com/jaysullivan/status/15138653219411...
TSLA's stock price may be $1000 by then, or it might be $500. If its $500, Musk may not have the physical money to finish this buyout offer, even if he wanted to.
This entire deal was made when Tesla was near $900 or thereabouts. But then the stock market started to change severely, the bond market changed severely, and now there's a lot of uncertainty if anyone really has enough money for everything to go through fine.
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Twitter's board has to keep both possibilities in mind. If Elon Musk's buyout offer fails (either due to Musk personally, or because of changing prices which rekt Musk's networth), Twitter will still need a plan for a Musk-free Twitter future.
I think it's somewhere between possible and likely that Parag ran this change by Musk. Who is already on record as wanting high-level changes. So this could be just as easily read as the CEO honoring the board's acceptance and getting started early on the changes. Or it could be both: Something that both the current and future CEO saw as in the bests interest of Twitter.
1. The tech market right now is a shit show, Twitter has only been saved from the general market trends because of the Elon offer. Once the Elon offer closes or falls through, Twitter's stock will correct. While Twitter is healthier is the time to get set up for that inevitable correction. The current market is driving fairly drastic action in the Tech Sector, just ignoring it because you're, potentially, a lame-duck CEO would be irresponsible.
2. These firings and changes may have been in the works since Parag took over so this is a course of action that predates the Elon offer.
Elon is proposing to buy all the shares, not just a controlling majority. Twitter would no longer be on the NYSE.
So twitter can be saved from general market trends indefinitely, as long as whoever is bankrolling it can continue feeding it cash whenever twitter operates at a loss.
Both Nvidia and ARM definitely needed "hands on wheel" regardless of what happened.
any company at this size needs "hands on wheel"
One guess (albeit not one of high confidence) is that the outgoing head may have expressed some reservations about whatever balancing-of-concerns Agrawal was expecting, or even mentioned a firm intent to leave if/when new-ownership arrives. In that case, it'd be very reasonable for the CEO to say, "I need someone here who at least has a chance of, and can earnestly simulate an intent to, stay through the change-of-ownership."
https://www.nytimes.com/2022/05/06/business/elon-musk-tesla-...
He's currently trying to ditch the margin loan: https://www.bloomberg.com/news/articles/2022-05-12/musk-seek...
What do you mean by "have to"? Do you mean there is a legal obligation?
I interpreted that as he was asked to resign. Which in practice most people consider the same as getting fired. At this level it's rare for someone to actually get terminated though, you would have to do something illegal or highly inappropriate. It's almost always that you're asked to resign and you get a generous severance package to go with it.
If an executive is gunning for a rank and file employee, there is no defending yourself except through wrongful termination lawsuits, etc. Being sat in the office when it happens won't help you save your job from an executive that wants you gone.
that said, in this case this guy's likely a millionaire so it's less of a big deal... kind of rude though
I'm not saying this is right, but it makes a lot of sense.
Neither of these things seem particularly kosher moves to make. The question is how to figure out which one it is.
It would seem weird for Parag to be following Musk's orders given how Musk has behaved. It also seems weird for Musk to already have the insight into the company to know specifically who to fire. There's not much advantage to making these changes now.
On the other hand, going rogue and making big strategic decisions about the company really has the potential to burn Parag's reputation for wherever he would move next.
I guess there's a third option - that Musk has expressed a specific view, Parag has a different view, but that they both think that this move is necessary anyway so just got on and did it.
https://www.businessinsider.com/sec-investigates-elon-musks-...
For Parag, I don't see it "burning his reputation" at all, considering either a) he's right and will face the tall task of helming a Twitter that continues to disappoint its investors or b) he's wrong and it won't be his problem when Elon fires him next year.
The probability that Elon is margin called by year end is roughly 40% according to option prices.
- 60% chance you get fired either by Musk or investors if you don't turn the ship. - 40% chance you Musk is margin called and doesn't take over, but still might be fired by investors or acquired by someone else who may in turn can him.
His wealth is mostly owning 20% of Tesla, plus some extra few billions from owning significant fractions of SpaceX, The Boring Company, and Neuralink. Presumably there’s some cash in there as well, but on his scale a hundred million is a rounding error.
I'm not saying this as a Tesla-lover nor as a fan of Musk, in fact, as a lover of gasoline engines and of cars in general I see this as a tragedy (I regard EVs as refrigerators with some wheels attached), but it is what it is.
It's the same reason they aggressively pretend Apple didn't spark the smartphone revolution (when it all very obviously derived from the iPhone and its dramatic impact, right down to the design of the phone and interface being copied by everyone else).
It's the same reason if you say the US invented the Internet here on HN, you'll get confused replies by people from outside of the US that are entirely ignorant of that fact, because of foreign revisionist history and the desperate desire to deny the US credit for its vast accomplishments (the America bad brigade). The same goes for eg the transistor, microprocessor and countless other prominent technologies that revolutionized the world.
It's still a business and it is tiny compared to the big players. Tesla is only a slightly better value than crypto given how insanely overvalued the stock is. If the company had an $80B market cap, it would still be vastly overvalued.
It’s currently undervalued at 10x that price.
Re being small: its operating income was greater than Toyota in Q1, and it has two new factories that are yet to ramp production.
The Tesla Roadster was developed around the same time, yet deliveries started in 2008. By the time Renault got around to actually making the Zoe available to customers, Tesla had been selling the Model S for 6 months. I don't think they were taking EVs particularly seriously if they took that much longer to put out a less sophisticated product despite having vastly more resources at their disposal.
Making the first mass-market EV was going to take multiple years, no matter what. You need to engineer the entire car, at scale, and you need to hit a price-point. Tesla didn't have such an issue. I can't stress enough how much more difficult it is to make an affordable product than one where price is no object.
It is my belief that those "competitive cars" wouldn't have happened if it hadn't been for Tesla.
Tesla brought glamour and practicality to a field stymied by boredom and theoretical concerns. They pledged to build an EV people would actually want to use, bringing all the latest tech to drive UX with no regard for tradition. They set to solve consumer problems, and they are succeeding in doing that.
I don't have an interest in Tesla nor do I particularly like Musk, but objectively speaking, they must have done something right - they started a mass-car company from scratch in the third millennium, something very very hard; they popularized a technology that had failed to get traction for decades, and have taken the fight to behemoth corporations that had been bearish on the sector's overall future since the '90s. That simply cannot be just marketing or "gimmicks".
If 90% of the time one can own a median vehicle wherein they never have to go to the gas station, the vehicle lasts 1,000,000 miles, they aren’t emitting CO2, and gas prices go past five dollars…
it might be common sense to use the savings from the situation to rent vehicles to satisfy the other 10% of your needs.
But hey, maybe your idea of common sense is to sit around 16 feet in the air with 120 mph winds blowing against the side of your moving brick.
Everyone else has to buy to cover the 99% pctile or they’re screwed when they need to do something somewhat unusual (long drive to grandmas house, move, vacation, family emergency, whatever).
And for those who say ‘just rent!’ - I’ve tried, and most of the times you’d want to, you can’t get a rental, because a bunch of other folks got there first! Rental companies can’t buy enough cars to handle peak usage a few times a year.
The "supercharger" network is something that no other manufacturer was doing or was seriously interested in doing, and it's an extremely practical concern.
> When the IC companies convert over
... a lot of them they might well end up buying batteries from Tesla. Tesla will also continue to be the benchmark against what EV will be measured, in the same way Ford continued to be a reference for decades after competitors matched them.
EV was, at best, a curiosity and definitely nobody's main focus, until Tesla first showed EV cars are not golf carts (with the rooadster) and then that they can be a desirable higher-class sedan (with Model S).
If Tesla went bankrupt today, we'd still be firmly on the path to phase out ICE cars.
This was totally unconcievable just a few years ago. Tesla did that.
I would say that the advance in battery technology, the laws introduced by state of California and north european countries did more than Tesla ever did.
Also the Renault Zoe, still top selling EV cars in europe, had her first concept car showed in 2005 and was on sale only 5 months after the Model S in 2012. The Leaf also predates the Model S.The 1st generation Tesla Roadster sold poorly like most other contemporary EVs and most of the sales happened in her last year in 2012. It was as niche as all other EVs in the market in its first 3 years of commercial life. The Mitsubishi i-Miev and its Citroën and Peugeot variant outsold the Tesla Roadster by more than a factor of 10. Almost 30000 cars between 2008 and 2014.
What Tesla achieved was showing the wealthy people they could greenwash their way to the same energy wasting life by going EV. A good publicity stunt.
Look at i-Miev and the Roadster and tell me which one do you think a typical car lover would love more. If you think that would've taken over the car market .. then you're definitely not in the same circles I am :-)
Other car makers started paying serious attention only when Tesla inexplicably didn't go under and Model S started to be a success.
>Look at i-Miev and the Roadster and tell me which one do you think a typical car lover would love more. If you think that would've taken over the car market .. then you're definitely not in the same circles I am :-)
The car industry do not care what the typical car lover love more. They have been a dying breed for more than 3 decades. The i-Miev and derivated counterpart sold 12 times more than the roadster because they are actually usable things and not enthusiast toys. It even outsold the Model-S in all the other markets than USA when they were both available.
The Model-S,X,3 and Y success came much later. The automotive industry definitely had a more cautious approach in the upper end segment but they weren't sleeping.
In many industries, you can see these "bar-raisers."
Starbucks didn't invent coffee, but they created a mass market for a more premium sort of coffee in a country that previously didn't see coffee as something more that a thing you chug down in the morning so you can wake up.
Nintendo didn't invent video games, but they raised the bar for home consoles after the "great video game crash" and have repeated the feat several times since despite rarely if ever being on the cutting edge of tech.
And so on.
Tesla did something similar. Previously, electric cars and hybrids were seen as dorky and decidedly uncool by most. Tesla changed that public perception. It's hard to imagine the "luxury" electric car market existing without them. Perhaps another company might have accomplished the same feat, but Tesla was the first one to pull it off.
From a raw innovation standpoint, these advances are huge because by creating new market segments, they ensure a flow of money into those markets. Tesla's expense has paved the way for billions if not trillions of dollars into EV R&D and battery R&D. That matters, a lot.
As to why - ICE dealers didn't want to lose recurring revenue streams and ICE manufacturers didn't want to disrupt the means through which they would service the loans that they took out to build out their present ability to manufacture at scale. The incentives were perverse and in some cases still are perverse enough that the ICE industry has to be forced to help kill itself off, rather than dying willingly because it is right.
At least those were new markets.
At the end of the day you can't explain love and people love Elon Musk. Guys from all over the world are in a sort weird parasocial relationship with the guy. That never happened with the CEO of MySpace and BlackBerry
Worship and bashing/hate are the domain of the crazies/extremists/zealots who are a vocal minority, really a small proportion of the world. Most people thankfully are more balanced and rational in their perspectives.
The Leaf and the 3 basically met in the middle at the same time at about the $45K price point for similar cars.
Tesla was only first in the category of outrageously expensive cars for virtue-signalling rich people who fake-care about evironmentalism. And fake self-driving.
Looked at another way, if the LEAF and 3 cost the same, would many people have bought the LEAF?
Their recharge network still sets them apart as well.
Do you realize how bad that is? People had to adapt to the S limitations.
Then, it turned out, people bought them by the hundreds of thousands, single-handedly recreating the market for EVs.
Then, other manufacturers noticed, and started realizing they might be left behind if they didn't take EVs seriously.
Now, sure, there are many competitors, but even still they have only been built in small quantities.
How long Tesla's edge will last is an open question, but there's no question that Tesla has single-handedly exploded the demand for EVs in the consumer vehicle market.
Otherwise, Nissan would have been Tesla. They have produced some of the first practical EVs, way before Tesla did. Unfortunately, they made them for the Japanese consumer, not for the average american. At least not initially.
I love my LEAF, but a little over a dozen times per year, I have to trade cars with my spouse to accomplish some particular day's driving.
But I don’t think Nissan would’ve been Tesla: they didn’t think people would pay for a full-range EV (and still don’t, looks like?) and didn’t prioritize it. For many Americans that means the LEAF could not be their only vehicle.
The supercharger network also played a huge role in normalizing EVs, in particular in making the Tesla Model S the first car you could convince yourself was a great car that “happened to be an EV”. The S isn’t perfect, but it doesn’t have any huge, obvious EV-related deficits, like the LEAF’s range and charge time.
Tesla created the market for high-performance EVs. They did not create the overall EV market. The high-end market is only a small part of the numbers.
Also the Renault Zoe looked just like the Renault Clio, that is, a normal car.
If “high-performance” means “can handle the daily driving needs of > 50% of the population” then I guess you’re right, Tesla only created that market.
The Zoe also had a 150km+ effective range, which is more than enough for most people (maybe less so for Americans).
Tesla’s chief designer himself: “We are past the idea of an environmentally friendly vehicle needing to look different. People don't want to sacrifice anything, including style, to own an efficient car.”
You definitely had to compromise to own it, on almost everything aspect. Despite everything else, people were buying it because it was electric.
But my point is that could do everything an American expects a baseline car, like a Honda Civic, could do - it worked as a car in addition to being electric, which is more than can be said for the Leaf and Zoe, on range and charge time concerns alone.
> But my point is that could do everything an American expects a baseline car, like a Honda Civic, could do - it worked as a car in addition to being electric, which is more than can be said for the Leaf and Zoe, on range and charge time concerns alone.
Sure, at 100k$, which is too much for what an American expects of a baseline car. I am sure Renault and Nissan could have done it to if they had multiplied the price by 4, but then it would defeat the entire purpose of a practical everyday car. It's like saying that Ferrari makes practical every day cars because of the GTC4Lusso.
Let me ask you this: The Model S outsold the Leaf and the Zoe, and helped launch a new car company that has now sold more BEVs than any other manufacturer. Why do you think that is?
One possibility is that they made EVs that many people wanted to buy, and people bought them. I'm proposing that this is the case, and the fact that the Model S sold well despite costing $100k is an extremely strong indicator of this.
New EVs, even those from established manufacturers, are emulating Tesla, not the Leaf or Zoe.
Without Tesla, we may have had many Leaf or Zoe-like vehicles, but given how uptake of those vehicles went, it seems unlikely that we'd be where we are today -- in California, in 2021, BEVs were ~10% of all new vehicles sold.
Personal opinions of the cost or style of Tesla's EVs aside, one can't deny that Tesla made EVs attractive in the eyes of Californian consumers, and as goes California, so goes the world (for better or worse).
To this day, GM sells that "direct competitor" with a ~55kw charging limit.
Tesla is what made the other manufacturers realize that people were willing to wait 15-25 minutes on DCFC while road tripping electric cars.
Incidentally, these margins are also far higher than those of ICE manufacturers. For example, Toyota in Q1 had lower operating income than Tesla, despite having 4x the revenue.
So... like Apple?
Compare to Jeff Bezos, for example, who owns 10% of Amazon
To be slightly more quantitative, we're talking about folks who make roughly $100K and up, particularly the ones who and don't have kids.
So, roughly the top 15% of earners in America.
Tesla's P/E ratio is currently 106. I have no idea why Tesla is so expensive.
Which is because, his work/impact as ceo is visible on company and industry levels. contrast that with mba shortsighted ceos and/or ceos who sit on their assess waiting for golden parachute to deploy (thats the sentiment, irrelevant if unfounded). Charisma and beeing somewhat casual/releatable person on tv also helps.
If it's just about EVs they should soon be priced below Ford. Even self-driving is insufficient as long as a driver needs to pay attention. Other companies are catching up - who cares if they need more hardware and can't do just vision, it's becoming cheaper.
Tesla's market cap is now 740B. For a while there it was over 1T. Here's a fun visualization:
https://www.youtube.com/watch?v=zRQlsDHbl0M
https://www.volkswagenag.com/en/news/2022/01/Volkswagen_doub...
Tesla produced 936k cars last year, so VW will probably need to build more than 800k EVs to surpass Tesla in 2022.
https://www.caranddriver.com/news/a38657616/tesla-million-ev...
Because the market doesn't, and shouldn't, value things solely based on a snapshot of current business, as opposed to a projection of future business, based only partially on the current snapshot. A phrasing that gets at the market's thinking looks more like "A car company that effectively created the electric car market, right before the entire industry started making credible commitments to switch primarily over to EVs, all while being the most successful company at getting some degree of automated driving into consumer hands and awareness". Your phrasing implies "pre-Cruise GM, but with less sales"; it's no wonder why you're confused.
Note that I'm not claiming that Tesla is appropriately valued right now, and as someone who works in AV, I think their approach to self-driving is misleading and irresponsible. But it sounds like the bulk of your confusion comes from a significant misunderstanding of what the stock market _is_.
The market is betting on Tesla being "Apple for EVs", with a combination of first-mover advantage and innovative secret sauce. Apple similarly had competitors but an Apple bull in 2008 is a very happy man today.
I was narrowly responding to the parent comment's misunderstanding of what valuation is: specifically, the fact that it includes more than simply the current state of the business, incorporating future success as well.
"Tesla's market prices relies on super optimistic assumptions" is a sound complaint. "Tesla is a midsized car company" is a nonsensical one.
I think OP would not be the confused one in 6 months time.
Stock market only cares about the future when people care about the future. AKA when there is optimism in the air.
The 2015-2022 wave of optimism was quite frankly uncalled for and overextended given the reality at the base level. Especially what happened 2020-2022.
Apologies, but this doesn't make any sense. The OP referred to the current size of Tesla ("mid-size car company"), with no reference to future cash flows, which is what the majority of most stock prices are made up of.
Looking at where tesla will be in six months _is_ looking at the future, which is the exact opposite of what I was remarking on. If the complaint had been "Tesla is overvalued due to irratuonal exuberance that its future revenues are unlikely to deliver on", I wouldn't really have any disagreement.
Elon's is around $240B, so it sounds like 10x the amount.
Even by different calculations, it seems like an order of magnitude is a big difference.
By GDP, they are both worth around 1% of the US GDP, but the US GDP is many times what it was then, particularly post-WWII.
Musk's buying power seems significantly more than Rockefeller's by any metric.
1. https://www.usinflationcalculator.com/
How much money did musk really make? how much of it is an artifact of monetary policy.
PayPal is a $25b sales, $4b operating income giant in the financial sector (payments / payment processing specifically). They have an $83b market cap and have sales equivalent to Germany's largest bank. Musk doesn't own a meaningful part of PayPal, it plays no role in his present wealth (other than he sold his ownership stake in PayPal to fund the early days of Tesla & SpaceX).
Tesla is very obviously overvalued by a lot (by $400b-$600b at least), there's no rational argument against that. However being a major owner of BMW, which is perhaps what Tesla is best compared to in size and profitability now, is still a rather dramatic financial position to have (obviously). If we (when the market does) adjust Tesla to a more rational valuation, Musk would be a lot less rich, but still among the ~20-30 richest on the planet. Owning 16% of a segment-leading, tech-leading, growing car company that generates $12-$14b in operating income, is a very good business to be sitting on.
SpaceX is a lot more than a very good rocket company. Their connectivity business will likely be worth tens of billions of dollars in the future. No other entity on Earth can presently match what they've accomplished in rocketry and satellites, that includes China, the US Government, Russia, or their corporate peers. The connectivity network they're building is exceptional and very, very difficult (and expensive) for others to compete with. The value of their ability to deploy zillions of satellites rapidly, will increase dramatically as more uses are figured out for such constellations (the US Government in particular).
Every rational thinking person sees Musk and his behavior and throws any financial statement produced by Tesla straight into the bin.
They are cooking the books 100%. Musk believes in manifestation, self-fulfilling prophecy and faking it till you make it.
In the early days of PayPal he'd order to get parts of old fridges, paint them black in order to convince investors that PayPal had "supercomputers"
So it's never included in any measure of his total wealth.
(GP's point is that if it were, and also all the past charitable spending was, then Gates works be richer. (
Tesla is a battery-based company, but could also have been a transportation company and included Boring and SpaceX.
And Mastercard and Vida are both bigger in payments than PayPal. And PayPal was mostly Thiel's Confinity, which merged with Musk's X.com bank.
Not endorsing that, not an expert. Just think it's not as absurd as you suggest.
Well, it was either $54.20 or $69.00 (I suppose he could have gone for $44.20 but would that have tempted anyone?)
The margin loans will almost certainly be replaced with outside equity prior to closing.
Most likely it can, that much more so if Musk negotiates a lower price. Debt is very inexpensive right now, especially for large corporations with a strong balance sheet. If Musk owns all of Twitter, he gets their $6 billion in cash and their balance sheet has no consequential debt issues.
Twitter is operationally profitable, despite being very poorly run in terms of cost structure. Their margins on sales should be far greater than at present; they have a bloated employee count and have for a very long time. There's no reason Twitter can't spit off $1b in operating income on $5b in sales.
Further, Musk has ~$9b in cash (per Bloomberg), lots of very rich friends (eg Ellison, Google founders, VC billionaires, etc etc) that believe in him, and lots of assets in Tesla and SpaceX he can borrow $10b-$20b against if needed.
That said - I don't think levering himself to the moon is wise and I don't think paying $40b+ for Twitter is smart. Particularly at this point in time (with the global economy shaky, the US economy contracting in real terms, China's economy shaky, and financial markets sinking).
That's how I know people who make that argument don't actually know anything. It's like someone still talking about that great touchdown in high school at 50. Where's the next one?
You don't see Elon Musk bragging about his $22 million from Zip2.
I saw Google before the rise, Amazon, Apple, Bitcoin and Tesla. I only acted on Tesla after seeing all the other ones before but didn’t put my conviction into action.
It’s not very hard: you read HN daily/weekly and listen to the trends. Pick one that keep coming and interest you and dig deeper, you are not in a hurry as HN is way early in the cycle, the danger is being too early and giving up before it catch up. (Bitcoin)
Pick one big potential winner, calculate the expected value as good as you can Good/Bad scenario, place your bet, let the time do it’s thing.
An example of a bet I didn’t do: Bitcoin was 1$, I knew that if it worked very well it could go to 1M$. Let say you think that the probability of success is 20%: (1M$/1$)*20% = 200 000 to 1. You then place let say 5k$ on bitcoin and forget about it for 10 years.
At the moment, I don't see a trend that catch my attention beside AI and for the moment I think Tesla will be the winner in that trend.
Look up the book: one up on wall street
Since mid-2013, the S&P 500 is up ~150%, Nasdaq is up ~300%, and TSLA is up 3290%.
Tesla had 1.4% of all cars sold in 2021, by number of units. Going by revenue it's somewhere around 1%. It is kinda hard to see that as kicking the asses of the competition.
Kicking ass would be more like what happened with smartphones, where iOS + Android went from 0 to >90% market share in the space of five years, leaving Nokia, Palm, Blackberry etc. as brands nobody would assoviate themselves with. Nothing like that is happening in automotive.
They also have a much larger dealership network.
But that dealer network means when you need your car serviced, or repaired, you're never more than a short(ish) drive away from one.
Not that I expect Tesla to dominate like apple and android have, but I do think we’ll need to wait a few more years before we know the answer.
I don't see how that's comparable to Tesla VS old automakers
It would be like if Ford was stuck selling rebranded ‘awesome edition’ Tesla Cybertrucks instead of F150s at 10% of the revenue.
Tesla gets a lot of press. But the flash is always bigger than the reality, except when it comes to stock price.
Do you think more people bought Tesla 5 years ago, or in the past 1.5 years? Because the latter folks are underwater.
First, given the recent precipitous fall in the NASDAQ, there's speculation that Musk will lower the offer (which seems quite reasonable).
Second, I'm not sure there's any reason to assume these new equity investors are paying the share price Musk is paying. If Musk pays $54.20 a share, and needs to raise 25% of the acquisition cost by issuing new equity, he could sell 49.99% of the new company at say, $30 a share to his partners and still raise the required capital.
The way tycoons frequently do this involves putting collars around a significant portion of the margined stock (and for a sizable position like this, the trade would flow through to option prices on tesla and the stock itself via delta hedging or whatever the trade desks are doing as part of the trade)
This sounds like “two more weeks, MOASS, trust me bro” level of analysis. How can you possibly have enough insight into Musk’s financial holdings to make such an assertion? Nevermind the structure of the Twitter deal itself, which doesn’t exactly require him to fork over $40 billion in cash.
It is then easy to calculate 'at this price, the loan will face a margin call'. Options pricing implies a probability of a certain price being hit by a certain time. So they imply a probability of the margin loans Musk has getting a margin call.
Ofcourse, getting a margin call wouldn't mean the loan falls through. Guessing that would require deep insight into Musks personal financials.
How did you deduce this from options prices? IV?
The fact that it's not pegged to the purchase price already shows there is some skepticism that it actually closes.
Granted, this threshold is less than $10M, but it isn't orders of magnitude less
All of which is to say that it is basically impossible to stay in the Bay long-term unless you make an absolute fuckton of money.
Well, you do have two other options.
One is to commute in 2hr or more every day. Which a lot of service workers have to do.
The other is to share a house or apartment with roommates (if you're single) or with another family (surprisingly common, because what else can you do?).
These are both lifestyle decisions that differ substantially from what most people think of as "normal", past your 20s.
What I'm saying is, merely living a "normal middle class" lifestyle in the Bay requires absurd money. So I can understand why people act like absurd money is normal.
Rent is like $3k/mo, so $36k/yr. Say you have modest living expenses of another $34k/yr. Now you're at $70k/yr to break even. That leaves you with $90k to save/compound.
So, ok, you're doing very well as a renter with $5M invested, even in the Bay Area. And, given that you have more than twice the income you need, you'd probably be ok with only $2-2.5M. As in, breaking even with passive income.
Which would work so long as you don't want to own a house, and so long as markets don't melt down. That extra security seems to cost extra.
If you used cromd's figures of $5M in funds and lifestyle expenses of $400k/year you'd have spent ~80% of the principal (although you'd probably have reigned in your spending unless you were mad)
A boat doesn't just need to survive the harbour's average water level - it needs to survive low tide and high tide.
For me, financial security means something more like: money will be low on my list of problems. I could get more money by turning my attention there. I might have to work, but it could be some low-stress job, and losing it isn't a big deal. I could afford extra care for an elderly parent. I won't be knocked out by most random things that pop up, specific to my personal life, though I can't control what happens to my country etc.
For some, it means they don't have to work at all, and can't be ruined by market downturns that last decades. And further for some others, it means they can survive wars and societal collapse.
I think both are valid to wish for, though at a certain point it's a burden on yourself to control things you can't control. If there's a 1.1% chance of widespread nuclear war in our lifetime, and you want to be 99% certain your lifestyle won't take a hit, one needs to save and spend a ton to be able to weather it all.
But it’s a bit ridiculous to get 42 million USD and not be satisfied. And the original comment is ridiculous to suggest that it’s not sufficient compensation.
If you make 25k/year getting 1M is almost as good as getting 42M, because you are not used to thinking about anything you can do with 42M that you can't do with 1M. However, if your salary has been 10M/year, you most likely can easily see many ways to spend 42M, which are not something you think about often when you make 250k/year.
Does this make sense?
There’s nowhere in the world where the cost of living requires $10M/year. To spend that much money you are forced to spend it on high-end luxuries. Of course there are people who could easily consume that amount of money, but most people on that income would put it into investment instead of consumption.
It's a different question how many people actually spend 10M/year - I have no data about that, but I can easily see myself spending that much if my income has been 40M/year for several years. To me personally spending that money would not necessarily mean buying some high-end luxuries. It would probably involve trying to make some changes in the world and influence things. But yes, luxuries and interesting experiences too. If you're interested in this question, try finding more information about lives of famous rich people.
I've seen example of people selling their company, retiring early and stay low-mid budget. One particular example is very wealthy but live in a small house, drive a 10y old compact hatchback car. You wouldn't know his fortune just by looking at his habits. He enjoy more a BBQ with his neighbors than going to expensive places to eat and help around when someone in the village needs an additional hand. He is still probably spending a lot more than I do traveling on holidays and he has nicer furnitures but he is still doing it like most people do, only a few weeks a year when the kids are out of school. What he has is the ability to justify buying expensive but sturdy stuff that last, instead of things that break and have to be replaced on a regular basis.
With 42 million, he's fine. Time to care about someone else.
When it comes to levels, those kind of golden parachutes are offered only at top levels. VPs, SVPs, etc. are help and get normal packages when they leave, at least in normal, large blue chip companies.
TLDR: Companies don't engage in arms-length negotiation with CEOs. Shareholders don't hold companies to account for various structural reasons.
[1] http://www.pay-without-performance.com/
You say "this company turns over 20 billion a year revenue. If I want to I can flush the whole damn lot down the toilet."
"Pay me to not do a shit job."
Latest in executive compensation research. As advocated by expensive consultancies.
Most child prodigies don’t even work in corporate America and a lot of them don’t care for wealth. They’d rather go into theoretical physics or pure math.
It’s just a fun theoretical thought exercise, in which there’s no limit to how much one would accumulate, if their decision making is good to the infinite. He didn’t tank Twitter into the ground, therefore he deserves a good share. In practice, they use this money for themselves instead of reinvesting it into other endeavours.
I would be happy enough right now with an extra $420,000!
If it's unclear, people who don't particularly care for Musk (aka people who know Musk minus people who want to be Musk) may well start from the assumption that the current CEO was right. And if Musk-era Twitter doesn't succeed as wildly as some (one) person predicts, they stand to look even better in contrast.
I'm not saying that Musk will necessary fail––he's had quite a bit of success compared to, well, anybody. But he's been involved with a few duds, as well, and has set rather high expectations. It's an almost classic case of decision-making under uncertainty and I'd guess a Twitter CEO has seen a relevant case study or two.
People who have enough drive to become CEOs seldom want to retire like that.
In the meantime our company actually had to tell the a subsidiary of bigger acquiring company.... to sort of shove off on a partnership we had with them.
This subsidiary was crap and they were not holding up their end of the partnership. It was reiterated many times that "while we will likely be acquired by their parent company our job is to operate in the interest of our current stockholders and that best interest is to no longer work with <subsidiary>".
No word if the acquiring company ever responded negatively. By all accounts they understood (and really had a bigger picture in mind).
That situation seemed pretty logical to me.
Never heard about the subsidiary again.
That said, he is a very large shareholder already, and so if he, as a large shareholder, communicated something to the board, and they acted, then the claim that isn't kosher rings a bit hollow - large shareholders communicate with boards and some activist ones go further.
Internally I suspect there is some concern about Musk. The head of legal was reportedly crying regarding this buyout. They've got their misinformation management efforts around the biden laptop story and other issues (vaccines etc etc) that musk may not back as fully as Gadde did. So they could be moving some deck chairs in advance of Musks arrival. Be interesting to see how it shakes out, may not be smooth - Twitter is HQ'ed in San Francisco.
There are far more possibilities than those two. Here's just one off the top of my head (I assign no probabilities here, just pointing out this false binary): This person is being fired as a result of some investigation or process that began prior to the acquisition process and whose results have only just been reached. There are a whole range of process driving, "my hands are tied" scenarios that could explain this.
https://www.nytimes.com/2022/01/21/technology/twitter-securi...
It's conceivable that he already had a backlog of changes in his mind that he wanted to do at some point, sooner or later. But due to acquisition coming, sooner or later has turned into now or never.
If he legitimately believed these changes were best for the company before, he might still believe so.
In other words, yes, there's a reason, but not necessarily a nefarious one. It could be, or maybe it's as innocuous as urgency.
Because regardless if whether the acquisition falls through or not, this whole thing has underscored the need for changes at Twitter. The top two execs may need to go in order to move forward no matter what.
Your options are reasonable guesses as well, just not the only two possibilities.
If you saw their prior earnings they were over reporting by at least a million users. The people they fired would have potentially known that, or at the very least should have.
Further, due diligence will be done prior to sale. At which point items such as the above can / will be discovered.
Finally, there have been a lot of political decisions made by Twitter (banning a sitting president, etc). If that was done at the behest of government (as some claim) or advertisers (others claim). The result is the same, they made a decision which strategically let Trump start a competing and growing platform. Not good for business.
In any case, I suspect that’s the reason for firing.
> Twitter deal temporarily on hold. Elon Musk wants to evaluate if spam and fake accounts do indeed represent less than 5% of the platform's users base.
https://twitter.com/elonmusk/status/1525049369552048129
What if the board wanted them out?
There's lots of possibilities that don't have much to do with ol' Musky.
However, it does look better on the balance sheet when you get rid of two of your major cash burning expenses and their future vesting schedules.
CAP rate = net operating income / value of the asset
Basically you can immediately increase the value of your company by lowering expenses without having to justify a lower CAP.
Parag isn't a strong character like that. He's someone who plays by the rules and only says empty conventional things, without any personal opinion or feeling, couched in formal modern US corporate/tech language, with the required progressive veneer. I'm pretty sure he only thinks things along similar lines.
If in his viewpoint (he wouldn't be alone thinking so) Twitter recently became less appealing - booting the Lead of Consumer Product team seems perfectly reasonable to me.
Despite "we know he'll be gone" Parag may as well want to try to keep his chair when Elon takes over and is making changes that would be favored by the new leadership. And if the deal doesn't pass - firing the team leads (possibly) responsible for company's recent bad press and maybe Elon's move itself seems justified.
And in a deal like this where there is no "plan B" the CEO's exit compensation is entirely predicated on their ability to "set the table" well for the incoming executive team. So yeah, Parag is doing what Musk or Musk's team told him need to be done prior to starting there, and if he told them he wouldn't do it then no big package for him.
Clearly, it is biased to Silicon Valley and my experience is probably different than someone who worked in non-tech companies, but if I put it into a rule of sorts I'd say; During a fund raising round executive positions are the most secure and individual contributors the least, during an acquisition these are reversed.
Maybe he already wanted to make those changes but didn't dare to make them. Maybe he now changed his mind thinking: if I don't Musk will.
And on goes the list of reasons you can think of..
It may be that they are fired because Parag and the other leaders are concerned they will (or have already) share(d) information or otherwise cooperate(d) with Musk in ways Parag wants to prevent.
https://twitter.com/elonmusk/status/1525049369552048129
As for the hiring freeze, new funding sources are essentially cut off until the purchase either goes through or officially fails. New loans or lines of credit requests are likely to be reject due to the uncertainty around whether Twitter will be acquired or not, and addition sales of stock would be seen as a bad faith act because it would essentially lose the company funding if the sale goes through. Increased spending could cause liquidity issues for Twitter for this reason. It is a known fact that Twitter is not a particularly profitable business, and given all of these facts those executives may have been let go purely for financial reasons.
Trying to read into this without more knowledge regarding internal motivations is purely speculative and cannot provide reliable information. What's more, every major company would be aware of these likely motivations and would see his actions as ordinary under the circumstances even if it turns out his motivation was to keep Musk from having access to those employees.
In short, there would have be extremely compelling evidence of intentional malfeasance for this to impact his reputation or future career prospects any more than Musk acquiring Twitter.
I'll never forget letting go of staff in France and Italy. The employees were overjoyed we were letting them go and got into fights over who would be taking the packages. I learned that they received 1 year of salary upfront tax free with a bunch of additional benefits to help with job training and placement.
An average middle manager friend has had this happen 3 times, each time after a US acquisition. He now has a chateau in the south of france and is very happy with himself.
Strictly restricted? Of course not. But for what it's worth I've been told by numerous Europeans that they perceive casually throwing around extreme hyperbole to be characteristically American behavior. I guess it goes with waitresses pretending to love you.
One definition for "insanely" is [0]:
> to an extreme degree.
[0] https://www.merriam-webster.com/dictionary/insanely
Everything is awesome, amazing, radical, insane, great, gnarly, not to mention sick, ill, righteous, dope. Californians just love superlatives, use them constantly, wear them out, and need new ones.
This spreads like a fine coating of mold over the rest of the country before going on to annoy the Commonwealth, and then we repeat. It's pretty cool.
So you have a politeness continuum from very, to hecka, to hella, to fuckin'. Which is dank.
And when every superlative has been watered down like this, you need to pick a word that's completely over the top to express anything with any strength of feeling. It's good, it's great, it's awesome! It's fantastic! It's incredible!! It's insanely unbelievably wonderful!!!
"Insanely" is just the latest entry in our internal linguistic arms race.
In the past few years there's been a similar but opposite degradation: the only adverbs anyone uses are "super", "super not", and "not super". I think it came from the infantilized condescending culture on Twitter.
Lol
LOL, that's why you got the boot, pal.