Your Discomfort Is A Signal

In the last week or so, we (my Arts Editor and I) exited our position, as professional investors and advisors like to say, in the Elon Musk-controlled company Tesla (TSLA). Some of that position was the result of buying Tesla stock, and some of it was the result of the Tesla acquisition of SolarCity, another company controlled by Musk.

Regardless, we had become uncomfortable with Tesla. It didn’t hurt that we had made a tidy profit on Tesla stock over the years, nor that it seemed to be perhaps a trifle overvalued by the market, especially in the context of a pandemic that may force many businesses to become dormant and risk bankruptcy, in many cases again.

But we had recently become increasingly uncomfortable with the holding for reasons having nothing to do with its context, but with the company itself.

First, we didn’t like their strategies surrounding their cars. We had been in line to buy the Model 3, but when our names came up, we didn’t like how the car was sold: We were told that to avoid slewing off the road while the auto-pilot was engaged, we must keep our hands on the wheel during ‘S’ curves, since the feature as installed was not yet fully developed and we’d be likely to end up in the ditch if not paying attention.  As my Arts Editor is a former QA Engineer, she didn’t wish to be Tesla’s beta-tester when it came to the self-driving feature. We also didn’t feel that it was asking too much that a major feature installed in the car actually work.  Especially one which was being advertised as one of the car’s main selling points, which added a considerable percentage to the price of the car, and which, were it to fail, would certainly be a major liability and safety issue. We would have been happier to not have the feature, truth be told.

Their pricing strategy was annoying as well. Advertised as starting around $35,000, it turned out that, at least when we were considering it, it couldn’t be acquired for less than $52,000, as it was required that you also buy a package that significantly increased the price. I don’t recall how many packages we had to choose from, but we were unimpressed by this unethical bait & switch strategy.

But the discomfort truly started with Musk’s antics. They consisted of two incidents.

First, there was the incident in which a number of children from a Thai soccer team were trapped in a sea cave. After offering to help and being rebuffed:

In other replies to critics on Twitter Sunday morning, Musk said, “Stay tuned jack— …” and “Bet ya a signed dollar it’s true” to someone expressing skepticism that Unsworth could be a pedophile.

Musk deleted the Twitter thread hours later on Sunday, but not before they had been captured in screenshots. [Business Insider]

Spreading rumors of pedophilia is certainly beyond the pale, and the fact that he deleted the Twitter thread doesn’t mean he necessarily regretted the remark, as he should have, but may have been advised that it would be damaging. It brings up questions of his suitability and judgment for positions of responsibility.

But it’s been the second, recent incidents that have really left us with serious questions about his ethics and judgment: his refusal to take the coronavirus-caused pandemic seriously.

If somebody wants to stay in their house, that’s great. They should be allowed to stay in their house and should not be compelled to leave, but to say that they cannot leave their house, and they will be arrested if they do, this is fascist, this is not democratic, this is not freedom. Give people back their goddamn freedom. [Transcript from Wikipedia, recording of Tesla conference in which it occurred]

If he thought that might make him a folk hero, he failed with us. And then followed by this deal-breaker:

As Tesla’s Fremont, California, factory reopened in mid-May, CEO Elon Musk reassured nervous workers that they wouldn’t have to report to work if they “feel uncomfortable” about showing up to the factory during the COVID-19 pandemic.

Since then, Tesla has fired at least five workers for staying home due to COVID-19 fears, according to The Washington Post. Three of those employees told The Post they were fired in the past week. [Business Insider]

I’m not going to hold forth on how dishonest or unethical leadership leads to inevitable failure in business, because the tobacco industry behaviors and results would invalidate that claim.  But profit, regardless of societal cost, is not part of our philosophy of life.  Such behavior damages society, and why should we be associated with such behaviors? Are we so important that the very society in which we are embedded should be damaged just so we can have a few more dollars?

So we’re out of Tesla stock. Perhaps we’re going to miss the next big jump in value for Tesla. Maybe it’ll go over the cliff with the rest of the market as investors begin to realize that Covid-19 isn’t disappearing in the summer heat and loves to ravage the patrons of bars and beaches as much as it does rest homes for the elderly, and comes with life long damage for those who end up surviving the infection.

I don’t predict any of those things happening, because we don’t need to. Our discomfort with Musk’s antics was really enough. It betrays a dubious ethical framework, and quite possibly an arrogance, known to be associated with the bright and successful, that may lead Musk and Tesla down the wrong path.

Our advice to you: If you’re uncomfortable with an investment for non-financial reasons, get out. There are plenty of other fish in the sea, so why make yourself uncomfortable, perhaps for the rest of your life, just because some dollars have been dangled in front of you?

Sometimes, even when you’re just a little fish in a medium-sized pond, you still get to let your money speak for you.

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About Hue White

Former BBS operator; software engineer; cat lackey.

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