Three Burning Questions Musk Needs To Answer At Today's Tesla Shareholder Meeting

Everyone wants annual shareholder meetings to mimic the classic scene in Wall Street in which Gordon Gekko yells at the CEO (played by L.A. Law’s Richard Dysart) "management has no stake on the company."  Great scene, but actual annual meetings are almost always dry, uneventful affairs.  In Tesla's case managment does have a stake in the company, as Tesla's recent proxy filing noted that Elon Musk controls 21.9% of Tesla’s shares outstanding.  Hence the likelihood of passage of initiatives not backed by management is actually quite low.

So, ignore the sensationalist headlines about Musk's chairmanship of Tesla being "on the line" as a result of a proxy initiative to split the Chairman and CEO roles.  All the sturm and drang caused by a few shareholders and a pro-union advocative group (CtW) should be mostly ignored, except of course for the filing by CtW that references one of my recent Forbes articles on Tesla.

AUSTIN, TX - MARCH 11: Elon Musk speaks onstage at Elon Musk Answers Your Questions! during SXSW at ACL Live on March 11, 2018 in Austin, Texas. (Photo by Diego Donamaria/Getty Images for SXSW)

Elon's going to come out of today's meeting as the Chairman of Tesla, and the chances that James Murdoch, Linda Johnson Rice or Kimbal Musk (Elon's younger brother) are voted down as Tesla directors are, in my opinion, quite low.

So, ignoring the nuisance proxy proposals and rubber-stamping of Musk's hand-picked Board members, there are three issues that could be addressed today, and are certainly relevant to Tesla investors.  Tesla management will begin its presentation at 5:30 Eastern Time, and if the presentation follows the format of Tesla's previous shareholder meetings, there will be time for shareholder Q&A after Musk's prepared remarks.  I'll be tuned into the webcast listening for answers to the following questions:

1. How many units of the Model 3 is Tesla currently producing?  It's the most important question for Tesla stock players, both long and short,  and detail on current production levels was conspicuously absent from Tesla's infamous analyst conference call on May 2nd.  In the past Tesla has used leaked internal correspondence to tout production levels, but there have been no such releases in the second quarter.  Instead there have been stories leaking to the media, seemingly from whistleblowers inside Tesla, about build quality issues with Tesla's cars, some with a nasty tone.  Can Musk shift the narrative today with some cold, hard facts, or is the truth that Tesla is "stuck" at a level of Model 3 weekly production of about 2,500 and simply can't break that ceiling. I can't wait to find out.
2. Will Tesla need to raise capital this year?  I have argued the imminent need for Tesla to raise funds in several Forbes columns and that is the issue Bernstein's Toni Sacconaghi was trying to raise when Musk cut off his "boring, bonehead" question during the last analyst call.  Tesla is not a self-financing entity.  Tesla has bled $4.25 billion cash cumulatively in the past five quarters.  Someone has to ask this question today. Will Musk give a direct answer? I’m dying to know.
3.  What is happening with Steve Jurvetson?  Tesla's Board has been a man down since Jurvetson was suspended from his duties in November 2017.  A founding partner of legendary Silicon Valley venture capital firm DFJ, Jurvetson left that firm in the midst of harassment accusations last year. So his suspension from Tesla's Board (he was also suspended from the Board of SpaceX) leaves Musk short of an ally, and the Board itself short of a vote.  He needs to be either replaced or reinstated. There is no reason that his suspension should have dragged on for six months. Tesla has crucial decisions regarding capital deployments and capital raising upcoming, and a full Board needs to be present to approve those decisions.

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