Elon Musk is making bad decisions
In a revealing interview with the New York Times, Elon Musk revealed he is hardly getting any sleep, and when he does, he’s taking prescription drugs to do so.
No company has its fate so tied up with one person as Tesla does with Elon Musk. The reality seems to be that Elon Musk is tired of making cars, and he really just wants to fly rockets. It’s possible he did have funding secured to take Tesla private, but what is looking more likely is a fatigued Musk is desperate to alleviate his stress. “Funding secured” may have been wishful thinking.
Agreeing to a wide-ranging interview with the New York Times likewise seems ill-conceived. Why not go to a friendly journalist at Bloomberg or any of the Elon Musk fan sites? The Times would love nothing more than to paint Musk as unhinged and unstable. Indeed, the reading of the interview could leave shareholders with no other impression. (This particular shareholder sold much of his stake pre-market, guessing the market’s reaction.) So what’s a market actor to think and do?
1. Elon Musk is likely fatigued. He really is looking for a way out. In the Times interview, it was hinted that SpaceX might consider helping take Tesla private. I have no idea how SpaceX, the company, would ever consider such a buyout. But what it could mean is that Elon Musk’s web of private-funding lies may be growing. As it might become more clear that funding was not, in fact, secured, Elon Musk might be looking for any way to defend his tweets as legitimate. His other company, SpaceX, to the rescue! (Anticipate a statement from the SpaceX board today or tomorrow, with extremely vague language.)
2. Elon just wants to run SpaceX. Mass-producing cars is stressing Musk to the point of personal health issues and prescription drugs, but shooting off rockets packed with satellites is relatively enjoyable. Musk has said in the past his life goal is to get to Mars. Sure, he wants to make electric cars, but the company is now doing that. And while Tesla must deal with public markets (and short sellers), SpaceX is privately-held, profitable, and fully under his control. No wonder he imagined(?) a scenario where Tesla would be rescued by private funding and converted into a SpaceX-like corporate structure. Musk is not a robot (98% sure) and like most humans, given two options, he’ll eventually choose the less stressful one. Wouldn’t you? (Speaking of that, who wants to bet that Jack Dorsey doesn’t often wish he never returned to run Twitter?)
3. Tesla, the company, seems to be finding solid footing. It’s production woes may be in the past, with Model 3 production stabilizing. The reviews of the car remain high, as do resale values. It’s beating all other electric cars, it’s Autopilot is superior to competition, and the future looks bright. On the energy side, Tesla is having a hard time meeting the demand for its energy storage business, which, by the way, is the future of energy.
In the end, Musk may feel like he has done the hard work to get Tesla to stability and profitability and now the company can be put on Autopilot. He wants out, is my sense. If that’s true, it makes sense that the Times is reporting to be seeking a COO to take over much of Musk’s duties.
So, an investor needs to ask herself, how important is Elon Musk to Tesla’s value? And what are the company’s prospects without him? Me, I’m waiting for the stock to continue to fall– which I wrote about two days ago. I’m not as much a supporter of TSLA without Elon Musk. And I am quite concerned about Musk’s behavior, of which the most accurate adjective would be erratic.