(Austin Business Journal) - Analyst: Musk viewed as 'asleep at the wheel'
SpaceX has taken off.
Then there's the brain-implant startup called Neuralink that's promising to launch in earnest soon.
Plus there's The Boring Company, which has had a lot of ups and downs lately as it tries to revolutionize underground travel.
And then Twitter is a time-suck.
The ventures increasingly stealing Elon Musk's time away from Tesla Inc., as many see it, have plenty of people asking: Can he handle it all?
Wedbush analyst Dan Ives put it this way in a Dec. 27 research note: “At the same time that Tesla is cutting prices and inventory is starting to build globally in face of a likely global recession, Musk is viewed as ‘asleep at the wheel’ from a leadership perspective for Tesla at the time investors need a CEO to navigate this Category 5 storm.”
Here are some of the things that have Tesla shareholders worried:
• Tesla shares (Nasdaq: TSLA) crashed 11% on Dec. 27, sending shares to their lowest close since August 2020. That has Barrons reporting that Tesla is no longer among the top 10 biggest U.S. companies.
• Tesla suspended production at its Shanghai plant on Christmas Eve, Reuters reports. It’s burdened by elevated inventory levels as its second largest market — China — braces for a downturn and is bogged down again with Covid concerns.
• Tesla's woes aren't a flash in the pan. The company's stock has plummeted nearly 70% this year, lopping more than $800 billion off the company's valuation by investors. It had a market cap of $1.24 trillion at the start of the year, and is hovering around $342 billion today.
• On the street, Teslas are losing their luster. Prices of used Teslas are falling faster that those of other carmakers,Reuters reports — down 17% from a July peak.
• On Dec. 21, automotive news site Electrek reported that Tesla Inc. has warned some of its employees that it is freezing hiring and plans another round of layoffs early next year.
A lot of back and forth
It's all a very confusing situation for the new gigafactory and headquarters in Austin, where sources said the company now employs more than 10,000 people. Tesla has said it employs about 22,000 people at its auto factory in Fremont, California.
The Austin gigafactory is primarily cranking out Model Y cars — the same kind of vehicle in which Shanghai specializes. But Musk tweeted in October that Tesla is "recession resilient," and he said it will increase production in Austin even if a hard recession hits in 2023.
"Let’s say 2023 is a brutal recession year. Even then, we generate meaningful cash," Musk, who is CEO, told analysts in the fall.
Musk in June asked Tesla executives to "pause all hiring" and cut 10% of salaried staff. The company reversed that pause, however, and started growing hiring again in the second half of this year.
Musk on Dec. 20 blamed macroeconomic factors for the stock drop.
"As bank savings account interest rates, which are guaranteed, start to approach stock market returns, which are not guaranteed, people will increasingly move their money out of stocks into cash, thus causing stocks to drop," he said in a tweet.
That was in response to a tweet from longtime Tesla bull Ross Gerber, who said, "Tesla stock price now reflects the value of having no CEO. Great job tesla BOD — Time for a shake up. $tsla."
Gerber is a major shareholder and has asked fellow investors to appoint him to Tesla's board of directors.
Musk said Dec. 20 he plans to step down as CEO of Twitter once he finds a successor, after asking users of the social media platform whether he should. The poll results showed more than 57% of respondents thought he should step down.
Musk is spending more time in Central Texas these days, where his business empire is growing. Tesla's gigafactory opened earlier this year east of Austin, and Musk's other companies are also making moves in and around the Texas capital. That includes rocket maker SpaceX and tunnel-digging startup The Boring Company, which are building facilities in Bastrop County — and stirring up concerns from neighbors in the process.
By ABJ staff
