Is a story in the Business Insider blog, A Tesla-SpaceX merger deal of the decade, another public relations gambit to allow Elon Musk’s undercapitalized and underperforming companies to become an even larger cross-collateralized entity that might become be too big or too systemically important to fail? Possibly too big to manage given Tesla’s firing of 1,200 employees for poor performance at a time when the manpower needed to manufacture the Tesla Model 3 appears to be woefully inadequate?
As we saw from previous blog posts questioning Musk’s survival without favorable government intervention, the investor’s confidence reliance in the “bigger fool” theory that would provide liquidity for their investments, and the urgent need for another capital round to stay afloat, does this deal actually make sense or would it simply be another distraction from the performance of Musk and his management team?
Is their cash burn rate sustainable for the next six, nine, or twelve months.
Will investors continue to value Musk various enterprises as highly as they value the Musk story? Will Musk continue to capitalize on government policies, contracts, subsidies, and grants to provide enough cash flow and consumer sales impetus to actually fulfill corporate goals?
What is the present value to a rocket to Mars or digging tunnels under Los Angeles to a company that makes electric cars and solar equipment?
In the final analysis, is this a red flag for employees – an opportunity to get out in front of a potential bubble bursting? The proverbial handwriting on the wall that says “danger, prepare for an alternative future?”