The story Elon isn't posting about... (Hint: It's Tesla's stock price)
Feb 6, 2024
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Elon Musk joins the podcast to discuss Tesla's declining stock price and the negative headlines surrounding his decision-making. The podcast also explores the polarizing views on Tesla among Wall Street analysts and the changing short interest in Tesla's stock. Additionally, Elon Musk's financial situation and alleged drug use are discussed, including debates surrounding his leadership and the impact on investors.
Tesla's stock decline is attributed to a slowdown in electric vehicle demand and its high valuation compared to other tech stocks.
Elon Musk's drug use and concerns about his leadership and corporate governance are impacting Tesla's stock and public perception.
Deep dives
Tesla's Volatile Stock and Declining Demand
Tesla's stock has been highly volatile, experiencing a 30% plunge since late December. While this is not uncommon for Tesla shares, the current decline is historic, with around $200 billion in market value erased. One key factor contributing to the stock fall is the anticipated slowdown in electric vehicle (EV) demand, particularly for Tesla. Tesla is seen as the proxy for the EV market, making it vulnerable to any decrease in demand. The stock's high valuation also plays a role, as it is considered expensive compared to other tech stocks. The decline in demand and expensive valuation have led some Wall Street analysts to recommend selling Tesla stock.
Elon Musk's Role and Challenges
Elon Musk's leadership and influence are crucial factors impacting Tesla's stock and overall performance. Investors have closely tied the success of Tesla to Musk's ability to propel the electric vehicle industry forward, particularly with his ambitious visions of robo-taxis and AI advancements. However, concerns have arisen regarding Musk's drug use and his interactions with the Tesla board. The Wall Street Journal has published stories suggesting board members' worries about Musk's drug use and some members' desire for him to go to rehab. These reports further complicate the narrative surrounding Tesla's future, corporate governance, and the stability of Musk's leadership.
Implications for Elon Musk and Tesla's Market Value
Tesla's declining stock value has several potential ramifications for Elon Musk and his other ventures. As Musk has significant holdings in SpaceX and Tesla, the falling market value impacts his personal wealth and financial capacity. Musk's ties to the board and the concerns raised about corporate governance add an additional layer of complexity to Tesla's situation. Moreover, stories of Musk's drug use, despite being part of Silicon Valley culture to a certain extent, can erode investor confidence and potentially influence public perception. The combination of these factors raises questions about the sustainability and future trajectory of both Musk's personal ventures and Tesla's market value.
Lately, Tesla has been one of the stock market’s biggest losers. Since the beginning of the year, the company has dropped about $200 billion in market capitalization, making it the single-worst performing stock on the S&P 500. The spiral has come amid a storm of negative headlines—especially regarding slowing growth in electric vehicle purchases—a category Tesla has long dominated. Worse for Tesla, some of the most negative headlines were ones caused by Musk’s own erratic decisionmaking.
To discuss why Tesla’s stock is falling and what it might mean for Musk’s larger empire, we brought in senior reporter Esha Dey, who covers stocks for Bloomberg.
We also return to Elon’s alleged drug use. A necessary ingredient in his success to some, but insiders’ fear that Elon has become self-destructive and could eventually cause investors to rethink their beliefs.