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1/ Theories floated: someone(s) forcing rationalization at $tsla to present a plan for long-term profitability. Actors: A&M, Larry Ellison, various bankers, Butswinkas. Actions: RIFs at Tesla and SpaceX, dropped lease Port of LA SpaceX (for unfunded Mars - BFR missions)...
2/ Supercharging global price hike (to be replaced by localized prices posted by app), end of referrals / paid microinfluencer campaigns, Musk letter disclosing lower Q4 profits and suggesting Q1-19 losses, toned-down $tsla pumps in general.
3/ Given the looming lawsuits and liabilities from past actions ($scty self-dealing bailout, AP crashes, deposits not returned, registrations and titles not delivered, service reputation trashed) - multiple $billions in future payouts and lost brand value - I can’t see how.
4/ So back to reorg as the only viable plan. Ch11 necessary to shed lawsuits, debt, liabilities like unreserved warranty expense on the Model 3 debacle, referral awards, free supercharging for life and most importantly a change in control by wiping out most of Musk’s equity.
5/ From outside I see only the pattern gleaned from reading diverse sources. It’s consistent with a complex reorg that forces debtholders to take new equity, lets $tsla escape Musk’s mistakes (Mod 3 robotic mass production failure, $scty, solar roof tiles fraud, lawsuits...)
6/ Downsizes $tsla to focus on lux/performance niche, puts SpaceX under control of its other investors, promotes Musk to emeritus BS artist, prevents him from looting one company to paper over his mistakes at another, saves the hardworking competent employees...
7/ ... leaves customer warranties intact, withdraws the FSD-summon-AP claims and makes safety a real (as opposed ot PR) priority. New $tsla can be profitable selling specialty cars to status seekers. SpaceX can keep launching without the Mars and global internet BS. /end
PS: That’s the *optimistic* possibility. Or there’s just chaotic entropy maximization.
PPS - @markbspiegel suggests no new co could make it because of hot competition. This wouldn’t be the first time a reorg led to another BK down the line. But if it’s the best hope for retrieving *some* value from what would otherwise be a complete writeoff for investors/lenders..
Left out one actor: accountants feeling a “going concern” need.
