As Tesla stock has the worst week of 2023, after what was reportedly a disastrous earnings call in which owner Elon Musk ‘acted like a little baby’ according to reports, many are questioning if the enigmatic entrepreneur has finally bitten off more than he can chew.
The world’s richest man was understood to be ‘close to tears’ this week as he attempted to defend Tesla’s plummeting profits which fell to $1.85bn, sending shares nosediving 15%, with analysts asking ‘is the story over?’
Musk was understood to have blamed interest rates for a 44% drop in net profits, which didn’t wash well with shareholders, after admitting ‘we dug our own grave’ with Tesla’s long-delayed, fully electric Cybertruck.
But, it was his lack of ideas that is understood to have angered them most. Musk blamed issues on interest rates which he says will impact demand, as well as delays to a planned electric battery factory in Mexico, which is set to provide batteries for the new vehicles. However, whatever the challenges ahead, a complaining CEO blaming the economy and supply chain issues is not a good look.
And four years ago, things didn’t start well for Musk either. He unveiled the new Cybertruck at an embarrassing media launch (which resembled the X Factor stage with screaming live audience) where the ‘unbreakable’ windows smashed during a live demo.
This has led many to question, has the entrepreneur – who famously works 100-hour weeks – finally taken on too much?
His recent acquisition of social media giant Twitter, which was swiftly rebranded X after he slashed a huge chunk of the workforce. And a ‘strategy’ that seemingly lurches from one idea to the next in the quest to make the social media platform profitable, it’s a wonder he gets any sleep at all. The most recent change being X has started charging some users $1 a year, as part of a new global trial.
So, it comes as no surprise that Elon Musk may have taken his eye off the ball when it comes to other business interests, such as Tesla.
Biographer Walter Isaacson, who spent two years shadowing the billionaire to write his newly released biography, called the Twitter takeover “insane” due to the fact Musk lacks empathy, with the social media platform “not a good fit”.
Speaking to the Financial Times, Isaacson concluded that his time with the controversial figure had left him with big questions: do you have to be half crazy to be truly innovative? And how do you stop a brilliant mind from spinning out of control?
However, despite all this, Elon Musk has pulled back from the brink before, and he can do it again. He famously almost lost everything in 2008, with both Tesla and his rocket company SpaceX narrowly escaping bankruptcy.
And, despite being the world’s richest man now, 2022 actually saw him beat all records (and in fact scoop up a Guinness World Record) for the biggest fall in net worth ever recorded.
Elon Musk’s net worth was estimated to have fallen by more than $180bn last year, mainly due to the fall of Tesla shares which lost around 65% of value during the firm’s worst year on record.
Guinness World Record noted that although “the exact figure [of Musk’s loss] is almost impossible to ascertain,” with some outlets estimating that he lost more than $200 billion, the Twitter owner demolished the previous record: a $58.6 billion loss by Japanese investor Masayoshi Son in 2000,” reports CNBC.
And one thing’s for sure, with Elon Musk there will be plenty more twists and turns to the tale, as his businesses play out on the world stage amid tougher market conditions and increasing instability both politically and economically.
But only time will tell if the wheels have truly fallen off this time, or if the spirited entrepreneur can bounce back once again.
(Photo credit: Brendan Smialowski / AFP)
Keep up-to-date with the latest business news and analysis on Matt Haycox Daily. For all the latest news, insights and strategy, sign up for the Matt Haycox weekly newsletter, below.
