Politics - News Analysis
Musk’s Destruction Isn’t Letting Up: Tesla Recalls Hundreds of Thousands of Cars
Tesla motors announced a massive recall on a significant issue impacting more than 300,000 vehicles today. Musk didn’t need this news.
From Yahoo News:
There are more headaches for Tesla (TSLA) as the automaker revealed it is recalling 321,000 vehicles due to a safety issue.
In a filing posted over the weekend on the National Highway Traffic Safety Administration (NHTSA) website, the automaker said some Tesla Model 3 sedans and Model Y SUVs had an issue that caused the tail lamps to “intermittently illuminate,” meaning poor visibility on the road in some instances. Tesla said the brake lights were not affected by the issue.
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As said, Musk didn’t need this.
On April 14th, 2022, Elon Musk put forth his formal offer to buy Twitter at $54 a share. It was, inexplicably, a 38% premium above the market rate. Almost immediately, Musk started trolling liberals on Twitter. Roughly two months later, on June 16th, Musk declared that he voted for a Republican for the first time in his life. Tesla shareholders were the first ones to sense a problem, a big problem, as the stock, which makes up the vast majority of Musk’s wealth, dove. In the same time period, Tesla has faced at least 12 lawsuits alleging deaths caused by failure to stop for emergency vehicles.
Here is a tweet tracking Tesla’s share value since the beginning of the year. It is interesting to align major events:
$TSLA is trading at it's biggest disconnect ever between stock price and EPS trend. Bigger delta than "Funding Secured" and "Covid Lockdown" sagas. Use that information appropriately. pic.twitter.com/4e29gukNtV
— Alejandro Chavez (@aletechview) November 21, 2022
Musk has been called a “genius businessman.” It is probably more apt to call him a genius visionary who imagines what might be possible and then brings the people together who make the dream reality. With respect to Twitter, Musk has made mistakes that even a writer sitting here wouldn’t make.
Before one buys a $44 billion dollar company, one must ask oneself why one wants to make such a massive investment. After all, $44 billion could do a lot of people a lot of good if it was simply put into a trust to fund a good cause. One could only go forward if convinced that the company could be grown into a much more valuable asset, ideally to make more money to give away down the road. (Ideal world).
Such a question involves a lot of due diligence. Experts in tech, banking, accounting, valuation…
And part of that same effort involves considering the implications of buying the company on other assets one holds, including the largest. Even the best business professionals can stretch themselves too thin, and it seems as though the Tesla shareholders sensed that Musk would be stretched too thin and not pay enough attention to the company that made him the richest man on Earth.
Would Tesla have a 321K recall if Musk was more focused on the day-to-day management of Tesla? They are probably not directly related, though it cannot be ruled out. Was Musk intrinsic to Tesla’s growth and success? Without a doubt. Is it a near certitude that the more time Musk spends trying to keep the servers on at Twitter, the less attention Tesla receives, and – whatever it was that made Tesla a success under Musk goes missing? Yes. Look at the valuation just this year. (Yes, it’s been a bad stock market year generally, but not that bad).
It explains why Tesla shareholders have made the price Musk paid for Twitter far more than the $44 billion he initially offered. It is almost impossible to calculate how much the Twitter decision cost Musk. Oh, and the downhill slide overlapped with Musk flaunting his new conservatism, which may or may not be relevant.
Many at Twitter sure believe it’s relevant.
[email protected], @JasonMiciak, with Nicole Hickman