CEO Elon Musk responded to a year-old tweet with a thoughtful emoji around 2 a.m., reminding investors that there is rarely a dull day when investing in the leader in electric vehicles.
The tweet came from a Tesla investor (ticker: TSLA) – with a verified account – proposing that Musk form a holding company called X. The company would house all of Musk’s businesses, including Tesla, SpaceX, the Boring Company, which manufactures tunnels, as well as the brain research company Neuralink.
The objective of the holding company would be to ensure the survival of the human race for millennia. It is beyond the time horizon of most investors.
Tesla stock doesn’t do much to the tweet. Shares fell about 0.8% in pre-market trading.
Dow Jones Industrial Average
futures contracts both rose about 0.1%.
It’s a fun idea to consider, but it can be difficult to justify. The greatest synergy between the two biggest companies – Tesla and SpaceX – is Musk himself. The business fundamentals of space and cars are very different. Both require good engineers, but one is relatively small volume, high cost, high complexity – and has nothing to do with batteries. This is space. The other is battery-based mass production with a more manic focus on costs and a very different regulatory framework.
“An Elon holding company is the last thing investors want to see on the cusp of this massive stock sell-off,” Wedbush analyst Dan Ives said. Barron. “Knowing about Elon, a holding company given its stakes in Tesla and SpaceX, is something it could become over time, although in the next few years it is not the right decision in my opinion.”
So some sort of holding company with Musk’s own stakes might be possible. Who knows if that’s really likely or what the holding company would look like? Tesla did not respond to a request for comment on holding company X.
The tweet reminds us that investing in Tesla is never boring. In 2021, Musk fought – on Twitter – with President Biden, several senators, potential NHTSA rookies and made fun of
(AMZN) founder Jeff Bezos. There is always something, beyond base cars, to think about when investors think of Tesla.
X might be the best name for his business, but
United States Steel
(X) is already trading under the ticker symbol “X”. Musk might have a hard time getting the perfect ticker.
Write to Al Root at [email protected]