dspp
o2000,
If I may say so, and please excuse me if I am wrong, but your last two posts are quite identified with Musk. I am trying to understand and appreciate Tesla as being, at least somewhat, distinct from Musk. So wherever possible I am quantitative, and wherever not I am qualitative but aligned in some sense with business-relevant matters. I am very deliberately not worshipping at the feet of Musk.
regards,
dspp
The big problem with business that are built by a single individual is that should something happen to that person, the whole business often suffers.
From my studies of historical entrepreneurship there has rarely been a case when the departure of a founder has had a positive impact on the business.
If you think about recent business, e.g. the retirement of Bill Gates, lead to a long decline in Microsoft made better when Gates came back part time and the business moved to cloud to supplement the declining PC market. Apple went through a similar decline when Steve Jobs died, Walmart declined after the death of Sam Walton. Msft, Apple & Walmart had been built into huge business when the founders left and yet all were impacted badly. Tesla is still a very small business and as such if Musk was to go it is very likely imho, that the share price would tank.
This is in stark contrast to business that have evolved beyond the original founder such as one of he big autos. I doubt many folk know or care about who is the CEO of GM, or who the CEO of other big business such as GE or Exxon are, yet both them were at one time very CEO dependent: Edison and Rockerfella in the latter two cases.
So yes I can see why looking at the business not the CEO is an attractive way to do things, but from an investor/trader perspective interested in the share price the founder/CEO makes a huge difference to what investors/traders will pay for the business.
Folk are not created equal and no matter how good a prospective CEO might be on paper very few people have the necessary qualities to run a business in a way that brings a loyalty from their consumers. It is a strange emotional interaction that anyone skilled in the hard stuff like science, engineering and medicine will have trouble grasping, because all of these are endeavours where the focus is on the underlying calculus, not the overlying emotion.
In my studies it is the emotion that sets the share price not the skill of the folk who make things happen. The people who most recognise this are the politicians, the ones who connect with the emotion of the moment are the ones who are seen as doing great things. Whether the UK would have surrendered to Germany had Churchill not been chosen as PM we will never know, but before his choice there was a lot of government that wanted peace with Hitler what ever the cost. It was not as Churchill noted his contributions that gave us victory, but he was the roar of the lion that lifted the UK in those terrible days of 1940.
Regards,