Musk: ignore the “fuss and noise in the media” – Tesla’s on form
Few stories have been as interesting as that of Tesla over the last few weeks. Interesting, however, does not always equal positive – and investors have had plenty to gripe about. However, according to the electric carmaker’s mercurial, embattled, CEO, the news is only part of the story – and not the most important part by any means. According to Elon Musk, Tesla is blowing past production targets and witnessing incredible sales growth – and, following resignations, he’s just appointed a few new Tesla-veterans to spearhead it.
Tesla’s share price suffered last week on the back of bad news stories
SOURCE: Yahoo Finance
Musk is, depending on who you ask, both the best and the worst thing about Tesla. A former energy physics PhD student at Stanford University, Musk is undoubtedly brilliant – even by the standards of Big Tech. And he’s charismatic enough to have been the basis for Robert Downey Jr.’s iconic hard-partying genius superhero Iron Man (or, more properly, Iron Man’s billionaire alter-ego, Tony Stark). The downside is that Musk is erratic, eccentric, often inscrutable (whether he’s trying to be or not), stubborn, and – frankly – aware of his own genius. Those are not attributes usually considered positive when it comes to CEOs of publicly traded companies – but Musk is not just any CEO.
Recently, some of this has been on display. Musk is being sued by the British diver who aided in the rescue of a group of young Thai boys and their football coach from an underwater cave (the reason? Musk keeps referring to him as “pedo guy” with no substantiation). Last week, he sent investors into fits when he decided to give an interview to comedian and conspiracy theorist Joe Rogan – during which he smoked cannabis (in Musk and Rogan’s defence, cannabis is completely legal in California, where the podcast was recorded). Two senior board members walked out on Friday, and Musk has now replaced them with internal promotions.
It is very difficult, with all this wildness, to form any solid conclusions. Does it matter that Musk smoked cannabis in a place where smoking cannabis is legal? Is it important if he gets into bad-taste internet arguments with strangers? Within the limits of common sense, not really. Musk himself would rather everyone focussed on how his company is doing – provided they are willing to take his word on it, that is.
In an email that was later published as a blog post, Musk told employees: “For a while, there will be a lot of fuss and noise in the media. Just ignore them. Results are what matter and we are creating the most mind-blowing growth in the history of the automotive industry.”
Musk says that Tesla is on-track to build and deliver “more than twice” as many cars as it did in the last quarter. For the record, in the quarter under discussion, Tesla produced 53,339 vehicles and delivered 40,740. The only forecast the company made was for the production of 50,000 to 55,000 model 3s, so this suggestion fills a big knowledge-gap. One thing is certain: after years of production issues, if Tesla is building and shipping as many vehicles as Elon says it is, then it’s more than making up for lost time.
He’s also right that, assuming he can exercise a little restraint, underlying business performance is what really matters.
Dominion holds Tesla in its Global Trends Managed Fund.
If you would you like to receive the Newsfeeds daily, please click here to sign up now!Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
- Click here to print this story: Print
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.