Hump Day open thread: Trashing your business to own the libs
The only time I'll write about Elon Musk is when I can engage in some light schadenfreude. Today is one of those days.
Musk's main business, the electric car company Tesla, has been going through a few things. What things? Well, glad you asked!
- Yesterday its stock price fell almost 12% during trading on the NASDAQ.
- In after-hours trading, it fell another 2.4%; when the market opens today, it will sit at $106.69.
- Wait, what? $106.69 a share? Many companies would sacrifice children for that price. Except that this is down from where it was trading on Jan. 3, 2022, at $399.93 per share.
- In November of 2021, the company was worth $1.23 trillion. It has since shed close to $900 billion in market capitalization.
Analysts were worried what Musk's takeover of Twitter would do to Tesla. They feared that he would have too many irons in the fire. What they absolutely did not envision was that Musk would almost completely ignore Tesla, his main business, for his quixotic attempt to own the information space by acquiring Twitter. His two months at the social media company's helm have been disastrous for it, for Tesla, and for his own wealth.
Of course, there are other reasons for Tesla's downward spiral.
A car manufacturer selling about 100,000 cars per annum was in no way worth over $1 trillion. It was an unsustainable bubble. Part of Tesla's stock slide is a result of a much-overdue correction in its true value. Also, there's been a sharp drop in demand for the car, to the point where Musk is having to do things he'd never done before, like offer cash rebates to buyers. Then, of course, there are all the legal and regulatory fights in which Tesla is engaged, from cars catching on fire to civil suits dealing with a racist culture at the company.
In the end, though, Tesla is one thing: Elon Musk. He's not selling a car; he's selling himself as a visionary who will lead the world into a sustainable future. It was always bollocks, and it seems that investors are finally realizing that. His tenure at Twitter, where he is the only one making decisions, has opened eyes glazed over by the rosy story he was weaving about the great things which were just over the horizon. His shambolic stewardship of Twitter has been a wake up call. Far from being a prophet, he has shown himself to be an awful manager who has been propped up at both Tesla and SpaceX by the seasoned hands he has hired. Twitter, however, was always going to be his own fiefdom, unencumbered by any other opinions. And the markets now know what that entails.
Who knows what the stock will do today. Will it slide under $100/share? Considering that it dropped $16 yesterday, and with nothing in the offing indicating a course correction from Musk, that's quite possible. At any rate, it's entertaining to see the future Emperor of Mars cut down to size.