Tesla impresario’s latest act falls flat
Wall Street sees new manifesto as promising much but lacking meat
The hints, the tweets, the will-he-or-won’t-he suspense. It was classic showman Elon Musk.
Then his much-hyped 1,500word manifesto dropped and — whiff. The maestro may have struck out. His groupies still idolize the billionaire-genius behind PayPal, SpaceX, Tesla Motors Inc. and SolarCity Corp., the dreamer who wants to build hyperloops and colonize Mars. But recently, puffs of doubt have begun to surround the inspiration for Tony Stark in the Iron Man movies. After Musk mesmerized Wall Street for years, investors are starting to look for him to do something new: deliver financial results, or at least a road map for them.
The skepticism was on full display Thursday, after he unveiled his latest “master plan” to more than a few yawns. Tesla’s stock price slipped 3.4 per cent to close at US$220.50 on Thursday and recovered only part of that decline on Friday, rising 0.8 per cent to US$222.27 in New York.
The company had no comment about the decline in shares or criticism from investors. “What Elon said yesterday stands,” said a Tesla spokesperson in an email. Three board members did not respond to request for comment.
Quintessential Musk, the mission statement he posted Wednesday night was long on futuristic vision and short on details about things like how he’ll get his hands on the vast sums of cash he’ll need to execute all his ideas — for a new company blending Tesla and SolarCity, for an integrated solarbattery product, for electric buses and trucks, for autonomous ridesharing fleets.
“There is no real meat to chew on here,” said Dave Sullivan, an analyst at AutoPacific Inc., “which should only fuel skepticism and concern for cash burn.” Without details about timelines and financing, said Bloomberg Intelligence auto analyst Steve Man, “It is all just noise.”
That’s blasphemy to devotees in his fervent fan base of early Tesla vehicle owners, many of whom are also investors. The 45-year-old enjoys cultlike status across several sectors, as the architect of the first sexy all-electric car, founder and chief executive officer of SpaceX, the rocket-maker aiming for the red planet, and chairman of solarpanel producer SolarCity.
Musk the pitchman had kept them on tenterhooks for more than a week with tweets promising imminent delivery, and loyalists weren’t disappointed. “Elon’s brain is in a world that is 40 years ahead of the rest of the world,” said Sandip Gupta of Folsom, Calif., who owns two Teslas, a Model S and a Model X, and has reserved a Model 3. “Just take a sip of his Kool-Aid and you are transported to a virtual-reality world.”
What Musk called “Master Plan, Part Deux” came out after a rocky month for Tesla. The company has been on the defensive with Autopilot, its driver-assist technology, following a fatal Florida crash that spurred an investigation by U.S. safety regulators. A key manufacturing executive departed for Facebook Inc. Tesla delivered 50,658 cars last year and said it would deliver at least 80,000 this year, but missed its first two quarterly sales targets.
And Musk’s US$2.86 billion proposal to acquire SolarCity — which is run by two of his cousins and of which he owns more than 20 per cent — has been panned, raising concerns about corporate governance and the idea of adding more debt to Tesla’s balance sheet.