Will Elon Musk Gets Into Trouble With The SEC Again?
While speaking with CNBC’s John McDonald, Elon Musk indicated that he might start his own company in the transportation industry. If it were to fail, however, it would not be a huge problem, as he is one of the great visionaries of our modern era. However, if it did go well, perhaps he could challenge entrenched players in the industry, such as Boeing Commercial Airline (BA) which are some of the largest players in the industry. And they may be wise to follow him..
However, what happens if he fails? Well, for starters, there will be a stampede to buy his shares, likely at the expense of all his other investors. He might be out of a job, or out of a company, depending on how much trouble he causes. But he has also caused quite a stir, as some people are speculating that he has some sort of sway over the heads of the Federal Reserve. Further, if he were to somehow succeed, that would be bad news for those who believe that central banks should not be involved in creating money. Perhaps this is why the SEC is taking its time to get to the bottom of things, as it seems to be muddling up the water.
It would seem, indeed, that the SEC is trying to insulate itself from the potential losses that it might experience should Musk be unable to manage his business model successfully. And this is, of course, assuming that his ventures go anywhere. Indeed, the industry that he represents is probably no stranger to risk; after all, his Model III, the Hyperion, was once intended as a way of taking risk into the twenty-first century. However, given the recent slumps, and relatively timid outlook of the stock market, he might have to rethink his strategy. For those who understand the risks inherent in putting all your eggs in one basket, this is a very uncomfortable situation.
However, there are those who will take whatever risk is asked of them, as they certainly have enough to worry about. This is not just an entrepreneur who is taking a risk with his business, but rather, a visionary who is asking us to bet large amounts of money on a concept that is barely understood by the majority of industry insiders. Further, we are also looking at someone who is coming up against someone who is renowned as a problem solver, and who clearly has the experience needed to turn round an industry, and make it soar. There are so many fundamental differences between the two, and yet, there is much similarity, too.
All this may lead many to predict trouble for Musk. It is quite possible that the limited time and money that the entrepreneur has available will be used to fund an extensive PR offensive, as the negative media stories continue to build. In fact, it is hard to see any reason why such a campaign will not succeed. After all, the SBA under former presidents have been known to use the media against overly aggressive competitors, just to keep them in their place.
Is this an unfair assessment of Musk? It is, based on the record so far. However, it is also fair to say that the same cannot be said for other industry titans, such as Warren Buffett, or George Soros. For instance, Buffett’s passion and dedication to investing in companies that make the world a better place is well documented, whereas, many of the best entrepreneur-makers in the world have been willing to play the game and take risks, as they have grown their businesses into multi-billion dollar enterprises. So, it would seem, that no one really understands what the SEC is looking for when they are investigating venture capitalists, but, as long as the agency can find the missing link to the missing puzzle, then perhaps, we will be able to get a clearer picture of what is going on, and why – along with hopefully stop the next fraudster from stealing our future!