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Make Me Smart with Kai and Molly

Episode 114: Antitrust the process

May 21, 2019

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Tesla is synonymous with Elon Musk. Is that a problem?

Aaron Schrank Jul 19, 2018
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Tesla's stock has taken a hit.
VCG/VCG via Getty Images

Tesla CEO Elon Musk apologized this week not only to the cave diver involved in the recent rescue in Thailand, who Musk insulted, but also to the people who work for Musk. After months of erratic behavior swinging Tesla’s stock price, investors are worried about the visionary founder’s temperament.

There was the earnings call in May, when Musk mocked analysts, his statements going after short-sellers and journalists, and now his tweet suggesting one of the cave rescuers is a pedophile.

“That crossed a line,” said Gene Munster, head of research at venture capital firm Loup Ventures. “It just was showing a side that we didn’t feel was particularly confidence building for investors.”

Munster doesn’t own Tesla stock, but he wrote an open letter to Musk on behalf of investors, asking the CEO to apologize.

Analyst Ed Kim at market research firm AutoPacific said Musk is synonymous with Tesla, so anything he says reflects on the brand.

“Tesla’s stock has taken something of a hit,” Kim said. “Is it something that I think Tesla can recover from? Definitely, but Musk needs to more or less keep his mouth shut.”

Kim said the concern here is that Musk is cracking under pressure.

“The launch of the Model 3 is arguably the single-most important event in the company’s history,” Kim said.

That’s the affordable model Musk hopes can turn Tesla from a niche automaker to a mainstream brand. Up until last month, the company was failing to meet its production goal of 5,000 per week.

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