Is Tesla CEO Elon Musk losing it, or just expressing unhappiness that the media aren’t telling his side of the Tesla story? Musk has been ratcheting up the heat on the media (and analysts) this spring, at the same time Wall Street has been turning up the pressure on Musk and Tesla’s stock.
It started with a meltdown in an analyst call, and an apology. More recently, there’s been an escalation on Twitter that reached near-presidential levels, just without the late-night calls to Sean Hannity. Now, Musk is calling for a journalist review-and-rating site to be called Pravda. What gives?
The Story Behind the Story
Tesla has been the darling of the stock market for most of this decade. There have been plenty of stories about Musk as hero and some about Musk as a “good immigrant” (from South Africa and Canada) who’s now creating jobs and wealth in the US. At its peak, Tesla was worth more than every automaker except Toyota and Daimler. Earlier this year Forbes ranked him the 53rd richest person in the world, with a net worth $21 billion. The Tesla Model S electric sedan without a doubt revolutionized electric vehicles, and cemented the belief along the coasts that a Tesla is a classier car than a BMW or Mercedes-Benz. Plus, it gets you in the HOV lane without needing a passenger.
Early in his career, Musk founded the forerunner of PayPal. His SpaceX has sent private rockets into space. He helped create SolarCity and branched into slate-look solar tile (photo inset). He wants to build a HyperLoop vacuum tube system that would transport passengers from LA to San Francisco in 35 minutes, at just below the speed of sound. More often than not, Musk proved critics wrong.
Tesla missteps along the way have been documented visibly: a fatal May 2016 Model S crash in Florida (where the driver wasn’t paying attention, the NTSB concluded); problems making the Model X gull-wing doors work right (no surprise, as falcon wing or top-hinged doors are a beast to align); delays delivering the more affordable Model 3 sedan followed by production levels and deliveries way behind schedule, along with production shutdowns. In other words, about what’s normal in tech, and not abnormal in the auto industry.
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Along with other people who’ve been on top for a long time, some of the restraints normally imposed by others — whether by a boss, a spouse or partner, a lifelong friend, a board of directors, the company lawyers — haven’t affected Musk quite as much. He gets in the last word.
In 2016, former PCMag columnist Stewart Alsop, now a Silicon Valley investor, dissed a Tesla event that (in Alsop’s opinion) started late, was disorganized, and didn’t give all the potential buyers a chance to drive or even get in demo Tesla Model 3s. Alsop had put money down on a Model 3; Musk canceled Alsop’s contract and called him rude. (Editor’s note: We never thought Stewart was rude, but he was always direct. He comes from an honored family of journalists making a name for themselves since before World War II, and Stewart was not the first to upset the established order.)
Must be a slow news day if denying service to a super rude customer gets this much attention
— Elon Musk (@elonmusk) February 3, 2016
Fast forward to 2018. Tesla stock, as of Memorial Day weekend 2018, has fallen 29 percent from its $390 high last September. There are continued production issues. But also, the tension among Tesla, Musk, stock analysts, and the media have ratcheted up. From the investing side, the Seeking Alpha site has been a tough chronicler of Tesla. It has been an up and down year for Tesla, and what many see as fair and balanced reporting annoys Musk, either because it’s not fair or balanced, or maybe because it is.
Making light of concerns about whether Tesla might need to raise more money, Tesla turned it into a joke with an April Fools’ joke tweet. Analysts who may be jokers and pranksters in real life decried Musk’s immaturity in putting this out:
Tesla Goes BankruptPalo Alto, California, April 1, 2018 — Despite intense efforts to raise money, including a last-ditch mass sale of Easter Eggs, we are sad to report that Tesla has gone completely and totally bankrupt. So bankrupt, you can't believe it.
— Elon Musk (@elonmusk) April 1, 2018
Musk’s low point was a conference call with analysts Wednesday, May 2. For the most part, analysts were cool with Musk’s explanation of the soft quarter just ended. Then came the Q&A, and within the next day, Tesla lost $3 billion in market value (6 percent). An analyst asked about Tesla’s possible need to raise money to meet “capital requirements.” A transcript of the call has Musk responding, “Excuse me. Next. Boring questions are not cool. Next?”
Asked about orders for the Model 3, Musk said, “We’re going to go to YouTube. Sorry. These questions are so dry. They’re killing me.” Then Musk took several softer questions from a journalist who hosts a millenials-focused show on YouTube.
As for the adults on the call, a Barclays Capital analyst called it “downright bizarre … Elon’s behavior on the call should give even the uberbulls pause.” A Morgan Stanley analyst wrote that Musk was talking down to the “analysts on the call [who] represent the providers of capital that Tesla has throughout its history depended upon.” Musk sort of apologized the next day, but also said some questioners were analysts who wanted Tesla stock to go down (that is, making money by short-selling and waiting for Tesla stock to fall):
The “dry” questions were not asked by investors, but rather by two sell-side analysts who were trying to justify their Tesla short thesis. They are actually on the *opposite* side of investors. HyperChange represented actual investors, so I switched to them.
— Elon Musk (@elonmusk) May 4, 2018
A Plan to Rate Journalists
Most recently, Musk has suggested a plan to call the media to account by creating a website to “rate the core truth of any article.” Musk said, “The holier-than-thou hypocrisy of big media companies who lay claim to the truth, but publish only enough to sugarcoat the lie, is why the public no longer respects them.” The New York Post headlined it, “Elon Musk Wants to Name His Journalist-Rating Site After Communist Newspaper.”
Going to create a site where the public can rate the core truth of any article & track the credibility score over time of each journalist, editor & publication. Thinking of calling it Pravda …
— Elon Musk (@elonmusk) May 23, 2018
Musk said journalists live and die by clicks (not entirely untrue) and said the media were beholden to gas/diesel car companies.
Problem is journos are under constant pressure to get max clicks & earn advertising dollars or get fired. Tricky situation, as Tesla doesn’t advertise, but fossil fuel companies & gas/diesel car companies are among world’s biggest advertisers.
— Elon Musk (@elonmusk) May 23, 2018
Musk hit a roadblock when it turns out Pravda.com is taken.
Tried to buy https://t.co/S5kmNfnih8, but Russia said no. Turns out they already use it.
— Elon Musk (@elonmusk) May 25, 2018
Russia’s two traditional biggest news sources are Pravda, which means truth, and Izvestia, which means news. Musk might want to recall the Communist era joke about the futility of reading those papers. “There is no truth in Pravda, and there is no news in Isvestia.”
Meanwhile, even with Tesla’s stock in decline, it remains valued by investors far out of norm relative to sales. In the worst, worst case of all that Tesla was ever sold to another car company, it would be a huge deal. The Tesla name remains magic even as it faces ongoing challenges, the next of which is the pending Jaguar i-PACE, a long-range EV from a known, high-end automaker.
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