Elon Musk's Secret COVID-19 Agenda?
Never a dull moment.
Ask Elon Musk's children how to best sum up their world-famous billionaire father, and I wouldn't be shocked if that's the phrase they settle on.
Yesterday, during the Tesla (NASDAQ: TSLA) quarterly earning's call, the CEO went off the rails (as has been typical for him over the last few years) in response to the country's ongoing coronavirus pandemic management measures.
His choice of words was less than reserved.
Referring to the stay-at-home orders that now blanket the nation as "fascist." He went on to state that "forcible imprisoning" has deprived Americans of "their constitutional rights."
“It’s breaking people’s freedoms in ways that are horrible and wrong and not why they came to America or built this country,” he ranted during the live call with shareholders. “What the f–k? Excuse me. Outrage.”
This wasn't his first such public outburst on the topic.
Earlier that same day, using his favorite means of mass communication, Twitter, he made the following rather unambiguous post, not sparing the capital lettering one bit:
So, judging by these two proclamations, I'm led to the following suspicion: Elon Musk isn't a huge fan of the COVID-19 lockdowns.
The question that remains, at least in my mind, is "why," exactly.
Is he a freedom-loving American who wants his fellow citizens back at work or, at least, back outside? Or might there be a hidden agenda in there somewhere?
A hidden agenda that could, perhaps, see Elon raking in a one-day windfall of somewhere around $860 million?
The Race for $100 Billion
As you may be aware, Tesla and its cape-wearing, joint-puffing CEO are about to hit an historic milestone.
According to an options package put into place two years ago, if Tesla manages to trade at an average market cap of $100 billion or higher for a period of six months, the first of 12 options tranches will open up for Musk, allowing him to purchase 1.69 million shares at $350.02 each.
Based on this morning's share price, that would give Elon an $860 million payday.
Tesla's current market capitalization is $158 billion, and its six-month average is over $97 billion at this point, meaning that the target is right around the corner.
But that's if, and it's a big "if," the company continues to trade where it has been for the last several months.
With the lockdown in place and its factories shut down since mid-March, the chances of Tesla maintaining its current valuation are pretty slim.
Now, I know this might sound ridiculous, but what's another $860 million to Musk?
Elon's total Tesla share count stands at 34.01 million — valued at $29.1 billion as of this morning.
Just six months ago, that same position was worth just over one-third of that, so Elon's already made out pretty well in the last two quarters, adding close to $20 billion to his net worth.
Is he really going to go off the rails and start acting like a disturbed maniac in front of his shareholders just to pump his already monstrous net worth by a paltry 2%?
Well, it might not be that paltry.
What Would You Buy With an Extra $55 billion in Your Wallet?
Remember, this is just the first of 12 tranches.
The other 11, which will be unlocked progressively as the company heads towards an ultimate market capitalization target of $650 billion, will eventually increase Musk's holdings to the tune of more than $55 billion — putting him within a hair of that magical $100 billion mark.
That's a lot of iPads and Happy Meals for his five kids.
With the lockdown in place, however, and no set date for its termination, those 12-figure dreams are rapidly evaporating.
If it persists long enough, the company's very solvency, which has never been far from precarious, will be in question.
So maybe his stress isn't that hard to understand after all.
There is, however, one point of stress which even Elon, who has never been particularly reserved in voicing his feelings, will never reveal in a public forum.
You see, Tesla's future, even without this lockdown, is already in question.
It's a technical problem, and it's something that's been hounding not just Tesla engineers, but the engineers of every electric vehicle maker for more than a year.
A Michael Faraday Problem in an Elon Musk World
The issue is in the motors themselves, and it's a problem that dates back to the very first electric motor prototypes of the early 19th century.
The problem is the regulation of current flow to the motor's copper coil — or, more precisely, the total lack of any regulation.
This lack of regulation means that every electric motor ever built up until quite recently has been saddled with limitations as far as torque production.
Peak torque can only be achieved given a certain motor speed. Go higher or lower, and power drops off.
This leads to more wear and tear at non-ideal speeds, which means shorter service life, more breakdowns, more Teslas catching fire.
Now, this hasn't been a problem per se as long as there was no viable solution available. Tesla and its contemporaries have managed to get by just fine with their traditional motors.
Stay on top of the hottest investment ideas before they hit Wall Street. Sign up for the Wealth Daily newsletter below. You'll also get our free three part report, "After Apple: The Next Big Thing in Consumer Electronics".
This Company Owns the Future
But now a solution is available. It involves managing the flow of charge using advanced AI algorithms. It's been invented and patented, and the company behind it is already starting to license this technology to commercial manufacturers.
Electric bikes, electric motor boats, and now, as of just a few days ago, farm equipment.
Soon enough, the first electric car maker is sure to jump onboard.
Tesla does not own this patent. But to stay competitive, it will have to do something — and fast.
The edge this technology provides isn't limited to electric motors, either. It works the same way for electric generators, which operate just like electric motors but with the flow of charge going in reverse.
Generators equipped with this technology can produce as much as 8% more electricity per hour of operation — a huge margin when considering that generators account for 99% of electricity produced worldwide.
This dynamic power management is the future of electric motors and electric power generation... And the patent is held by a Canadian tech firm worth just a tiny fraction of Tesla.
A year from now, that can all change.
There's a lot more to this story as you may have guessed.
Get the full background and learn about the amazing company behind it all by clicking here.
Fortune favors the bold,
His flagship service, Microcap Insider, provides market-beating insights into some of the fastest moving, highest profit-potential companies available for public trading on the U.S. and Canadian exchanges. With more than 5 years of track record to back it up, Microcap Insider is the choice for the growth-minded investor. Alex contributes his thoughts and insights regularly to Wealth Daily. To learn more about Alex, click here.
The Best Free Investment You'll Ever Make
After getting your report, you’ll begin receiving the Wealth Daily e-Letter, delivered to your inbox daily.