The Fate of the Musk Corporations

In My Humble Opinion
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Mods: Perhaps this is better for IMHO? If so, then please move.

Musk has always been a bit unstable, but in the past several months (around when he bought Twitter) he’s has grown increasingly erratic. There have recently been a few reports that he is increasingly abusing several drugs (e.g., ketamine, Elon Musk's 'escalated' ketamine use could be causing erratic behavior, New Yorker exposé suggests).

Hypothetical: Suppose Musk keels over dead from a drug OD. To be clear, while I have zero respect for Musk, and I don’t think billionaires should exist, I am not wishing death upon him. Hopefully, he has the good sense to get some treatment assuming he is abusing medications.

Question: What do you suppose happens to his corporate empire? Can they survive without him?

My View:

Twitter: The Twitter CEO seems relatively competent but shackled as a shadow CEO. I think if she were CEO, then she could revive Twitter by undoing the damage Musk has done.

Tesla: Tesla seems to already be in trouble with continually weakening sales, and an inflated stock price driven by a (perhaps flawed) belief in Musk. Certainly the stock would tumble to a more realistic valuation. Tesla became what it is largely by exploiting a gap in the market (electric vehicles), but the bigger car companies have caught if not surpassed Tesla (perhaps due to Musk’s obsession with FSD). I think a new Tesla CEO would have to abandon FSD, and immediately work on improving Tesla’s sales figures.

Boring: Boring is dead without Musk. Period. It shouldn’t even be a thing. It is a subway but worse.

SpaceX: SpaceX certainly would do well I think. They’re a legitimate market leader in private space industry (I cannot think of the word… not exploration). They have a multitude of extremely competent people. The best in the business I think overall. They could hire a good CEO (or promote from within) and continue to do well I think.

X: X as a one-stop everything app is dead without Musk because it is singularly his vision (whether flawed or not).

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Who inherits?

According to wikipedia, Musk has fathered 10 children, as follows:

By wife Justine Wilson:
Son, born in 2002, died of SIDS at ten weeks
Twins, born in 2004
Triplets, born in 2006

By girlfriend Grimes:
Son, born 2020
Daughter, born 2021

By employee Shivin Willis:
Twins, born 2021

Assuming the above is true, Musk’s oldest living children are the twins born in 2004, so 19 years old. One of the twins changed her last name and no longer wants to be associated with Musk. The next oldest are triplets born in 2006, so 17 years old.

Musk is not currently married.

If his estate is parceled out in the typical manner (a big “if” given that it’s Musk), everything would be split into 11.1% chunks. That’s if the twin who changed her last name is still in the will. Only the twins are over 18yo, so they could be the only ones who directly inherit now. The shares of the rest (and of course possibly the twins) would go into trust until they reach majority or other age specified by the will. That means control of the businesses would presumably be in the hands of the trustee(s).

No idea who the trustee(s) might be. Again, according to Wikipedia, Elon has a brother (Kimbal), a sister (Tosca), and a cousin (Lyndon Rive, who cofounded Solar City). Any of these could be heirs and/or trustees.

I guess it’s impossible to speculate what happens to Musk’s corporate empire without knowing who would be in charge of it.

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Google suggests the name is Shivon Zilis.

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I’ll bite on those predictions.

Twitter: Disagree with BKB’s scenario, although more in magnitude rather than absolute. The CEO seems competent, and free of strong backseat management would probably make an effort to roll back many of the issues: free hate speech, lack of ad management, efforts to woo the advertisers back. But with all the debt taken on by Twitter, a likely further crash of Tesla and related stocks that may or may not back some of that debt and the probable issue of ever hiring enough replacement staff (and the lead time on it) to fix the ongoing issues, I think they’ll just slow the slide. Dramatically slow, but I don’t think it will ever have the chance to turn a profit. And because of that, they’ll keep some of the dramatically terrible stuff, like the paid verification.

And all of it will likely be too little too late to deal with all the costs of stiffing their vendors, landlords, and failing to comply with the international legal requirements to date.

Tesla: Unsure, but largely agree with the OP. Stock will tumble, and it’ll further loose it’s (earned? Unearned?) reputation as an innovator and premiere brand, but has the advantage that it’s standard is being adopted in the US. But without Musk’s constant boosting (arguably one of the reasons he bought Twitter) I think between the stock crashing and increased competition, it too will slowly fade into the background.

Boring: It’s always been a corpse propped up by Musk’s grandiose claims, without him propping it up it’ll return to the grave.

SpaceX: Strong agree with BKB, it’s at it’s best when Musk stays away. Sure, they’ll lose the boosting from Musk, but they’ve got solid government contracts with a proven product. And we know how aerospace has been allowed dramatic cost overruns and nearly unlimited support from our complicit government, so I can’t see it being allowed to fail especially in light of recent international space efforts. As long as the heirs don’t do anything too crazy and no absolute units don’t get to the top, they’ll be fine.

X: was always a pipe-dream (perhaps literally) as Musk has never IMHO made a serious effort to examine all the regulation and realities of such a thing, without Musk, will be quietly put back in the looney bin where it belongs. Not that such a thing couldn’t be done, but certainly not by Musk.

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Thanks! I should know better than to trust my memory on a name.

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My assumption, which might be wrong, is that regardless of who inherits none of them have shown much interest in being the new CEO of any of the corporations and so they would hire new CEOs.

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I forgot about the mountains of debt. I think you might be right on this one. Without the ability to get injections of cashs from Poppa Musk’s Tesla stock, Twitter would be in serious trouble.

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Tesla is AIUI the only entity that is publicly-held. The hiring of the CEO will be the responsibility of thge Board of Directors. I have no idea what percent of the stock is held by Elon, but it’s possible the heirs will have little impact on who is selected.

The other entities are privately held, so I would guess that the heirs/trustees will have a large impact on who is hired to be CEO. For example, if they want someone who is going to focus on short-term profitability, that’s what they’ll get. (Likewise of course if they want someone who will focus on the long-term even if it means larger short-term losses, that’s who they’ll hire.)

Which is not to say that whoever they hire will actually be able to do what was promised.

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Twitter is definitely mortally wounded. The big advantage that an established social media company has is that it’s a natural monopoly: The userbase is the product, so everyone wants to join the network that everyone’s already on. Once you’ve got that, all you need to do is not screw up.

And then Musk screwed up. He drove Twitter down to the point where folks started looking for alternatives. And by now, they’ve found them. Even if the new CEO were sane and sensible, they’d find themself now one of a half-dozen competing peer companies, with no reason to expect that they’d emerge as the eventual winner.

Tesla, I think will end up as just another car company. Unlike with social media, there is room in the market for a dozen different car companies. They might be a bit overvalued now, but they still have a real product that works and works well. And even if they end up as, say, the tenth biggest car company, well, I wouldn’t exactly mind being the owner of the tenth biggest car company.

SpaceX, as others have said, there really isn’t even any competition right now. I’m sure there will be eventually, but just the time it would take for any other company to catch up is already beyond any reasonable investment horizon (that is to say, it doesn’t make sense to make any longer-term plans than that, because there are too many unknown unknowns to make any sense of a longer-term plan).

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Tesla will end up as a division of GM. I won’t be here to see it, but it will happen within 10 years.

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I got the feeling that the good-ol-past speaks out of your statement …

I’d be surprised if either of Ford or GM exist in 10-15 years (except for - maybe - brand right holders or so) … they are all in hospice care already …

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There will still be large car manufacturing companies. Maybe it won’t be GM as such, but Tesla will not exist as an independant company much longer. And a lot of shareholder value will be destroyed in the process, IMO.

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By market capitalization, Tesla is more than ten times larger than GM.

While Tesla could easily take over GM, I don’t see the reverse happening.

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Musk holds about 20 percent of Tesla stock. His brother Kimbal has about 0.1 percent and, more importantly, sits on the Board of Directors, so he would have some say in the successor.

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That market capitalization is a total joke. There is no way that Tesla can grow into that as a profitable company. The correction, when it comes, is going to be brutal. It will be the dot com crash all over again, if we’re lucky.

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I read recently that Tesla true value (based on comparison to other car makers) would be about $25. To justify the valuation of Tesla they would need to be selling every car on the planet. And then some. But people argue that Tesla isn’t a car company it is a tech company based on FSD. I guess the thinking is that Tesla could have sold FSD to other car companies? Or the military? I don’t know, but it is pretty clear that Tesla’s FSD is a bust and if it comes it will come too late.

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I have seen similar articles on Tesla. It might have more future as a battery company, but that kind of low margin manufacturing doesn’t justify the stock price either.

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Is there supposed to be a “billion” in there? Or is that supposed to be the price of each share (fairly meaningless, without also saying how many shares there are)?

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I don’t know if Tesla is overvalued or not, and I do think at this point in time that all of these companies would probably benefit without Musk at the helm, but I think trying to find rationality in the stock price is a fool’s errand. It’s worth exactly what it will sell for.

It’s a shame that the first successful American car company to come along in decades is due to and being held back by the same person. Held back, not technologically, but just due to his public persona that a vast swath of potential customers actively hate. If he would have and continued to just shut the hell up he could have been one of the most admired men in world history.

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A tulip bulb is also worth what it will sell for, but that doesn’t mean that tulip bulbs cannot reach wildly inflated prices disconnected from the an actual realistic price for a tulip bulb.

No, he wouldn’t. He would have been perceived as another billionaire CEO, so perhaps similarly to Bezos. Musk has not ever achieved anything that would have made him so lauded. I mean come on “most admired men in world history”? It is things like this that make it hard to take Musk fans seriously. Gates does a lot of charitable work (for questionable reasons) and isn’t anywhere close to most admired man in world history. In fact, a lot of people think that Gates wants to put microchips in them… and ironically it is Musk that wants to put microchips in people.