15 October 2018

Does Tesla have a future under Elon Musk?

Not too long ago, if I’d posed this question you’d have reckoned me to be a suitable candidate for the funny farm. Has there ever been a mainstream automotive brand which has been so closely identified with one man? To the degree where the words Tesla and Musk are virtually synonymous. If there has been one, I can’t think of it. Now, I’m afraid serious questions are being asked about Musk’s competence to continue at the head of the company he co-founded.

Just look at the evidence. Let’s leave aside for the moment Musk’s inability to meet production targets and the long line of customers still waiting for delivery of a car they paid for up to two years ago. Let’s look instead at the recent increasingly erratic behaviour of the man himself. This is the guy who publicly called the British diver, who was instrumental in the saving of the Thai children marooned underground in a flooded cave, a paedophile, with no evidence whatsoever. This is the guy who branded US financial experts ‘boring’ and ‘boneheads’ for daring to question Tesla’s financial status. The guy who appeared on a live web show sipping whiskey and smoking wacky baccy. Yes, I know marijuana use is legal in California, but Tesla shares plunged in value the next day.

Talking of share prices, when Musk declared his intention to take Tesla private he set a share price of $420. Apparently, this number is some kind of code for marijuana consumption and was arrived at in order to amuse his new girlfriend, the Canadian singer Grimes. She may or may not have been amused but the US Securities and Exchange Commission (SEC) was not. Tesla shares, having risen in value to just under $380 in the wake of his tweets about ‘burning’ short-sellers and obtaining funding, real or imagined, for his deal, are now trading at just over $250. Musk and Tesla have each been fined $20 million by the SEC for allegedly lying to investors and Musk has agreed to step down from his position as Tesla’s chairman whilst still remaining on the board.

It has often been said that there is a very fine line between genius and insanity. I’m no psychiatrist and I wouldn’t care to comment on whether this is true or not. One thing I am sure of however. If I was a Tesla shareholder I’d be worried. Very worried indeed.


Sam Ogle

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