Elon Musk Bemoans the US Stock Markets, Regulations and the Media

Elon Musk complained about the U.S. markets, securities regulations and the media in a wide-ranging interview with Ark Invest CEO Cathie Wood on his social media platform X.

The regulatory and legal burdens for publicly traded companies are “way too high,” Musk said in a discussion that was livestreamed on X’s Spaces on Thursday. "Frankly, I would recommend companies don't go public, unless they absolutely have to."

According to the world's richest man, taking a company public is a “tremendous distraction.” Publicly traded businesses are more time intensive to manage than privately held companies, he said.

“There’s a lot of pressure, like immense pressure on a public company to not have a bad quarter,” Musk said, comparing the flexibility he has at his private company, SpaceX, with some of the constraints imposed on publicly held Tesla. “So this can actually result in a less efficient operation where you’re going to great lengths at the end of the quarter to not disappoint people.” 

In October, Tesla reported third-quarter profits that were down $2 billion from a year earlier. The electric carmaker also fell short of Wall Street’s — and its own — delivery estimates. It delivered just 435,059 electric vehicles in total for the quarter and 1.3 million in the first nine months of the year, compared with its targeted 1.8 million deliveries for the full year. 

“At Tesla, we feel like we have a sort of moral obligation not to have a bad quarter and disappoint people,” Musk said. “I've lost count of how many times I was delivering cars until basically midnight on New Year's Eve, personally.”

Tesla's shares are up nearly 107% year-to-date, and closed Thursday up 2.98% for the day.

Musk has long bemoaned the challenges of running public companies, telling SpaceX employees in a 2013 email that publicly traded companies “go through extreme volatility, both for reasons of internal execution and for reasons that have nothing to do with anything except the economy.” He noted that Tesla and SolarCity, a solar energy company acquired by Tesla in 2016, were public because "they didn't have a choice."

Musk quickly took the social media platform X, formerly Twitter, private after buying it for $44 billion in October 2022. Twitter had been publicly listed since 2013. The value of the company has dramatically fallen since then.

In Thursday’s discussion, Musk said he could have taken Tesla private, but that it would have created another distraction for the company and made it difficult for investors to remain invested. 

Musk was sued by Tesla shareholders in 2018 over a now-deleted tweet, where Musk said he was thinking of taking Tesla private at $420 per share and had “funding secured.” A California jury sided with Musk in February.

The Securities and Exchange Commission charged Musk with securities fraud that same year as a result of the “false and misleading” tweets. Musk and Tesla agreed to $40 million in penalties to settle the charges in September 2018, with the billionaire stepping down as chairman of the company.

Two major benefits that came from taking Tesla private were that it allowed the company to clean up its corporate structure, “which was overly-complex as a private company,” and gave it access to large amounts of capital.

He also lambasted the media, saying traditional outlets would never write that X was doing well because it doesn't get enough "clicks."

"You see the opposite headlines, which are quite misleading, that X is dying," he said. "It's getting a little tedious." Musk said he was "optimistic" about where the media company was heading.