Do Tesla investors trust Elon Musk less after his purchase of Twitter?
Getty Images; Jenny Chang-Rodriguez/BI
Elon Musk says self-driving Tesla taxis – something he’s been talking about for a long time – are close to being introduced.
But investors aren’t convinced: After his recent demonstration, Tesla shares plummeted.
Tesla investors are used to Musk making promises that he struggles to keep. But maybe there is something new.
This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by a real editor.
A few days ago, Elon Musk – who never likes to do something small when he can do something big – presented his latest products. Including not only a self-driving robot taxi, but also a self-driving Robovan. But: That wasn’t everything. Elon Musk also promised to one day deliver Star Wars-style robots that will cost around $30,000 (27,4000 euros) each.
One day, every person in the world will want to own a Muskbot, said Tesla’s CEO: “I believe this will be the greatest product of all time, regardless of type.”
2 reasons why Wall Street doubts Elon Musk
Wall Street is completely unimpressed by these announcements: Tesla shares fell by almost 9 percent. There is no question: there are many reasons for Tesla shareholders to be skeptical of Elon Musk’s arguments.
- Large-scale self-driving taxis present an enormous number of technical and legal challenges.
- Elon Musk has a long track record of promising Tesla products and features that either arrive long after the initial promise or never arrive at all.
And these Muskbots seem to be more of a special effect than a product at the moment. The skepticism is currently palpable. But the question is how much of the skepticism has anything to do with Musk’s track record at Tesla – and how much has to do with a company that used to be called Twitter.
This is how Twitter damaged Elon Musk’s reputation
And that argument – and to be clear, it’s really just a guess – goes something like this: Before Musk bought Twitter in October 2022, Musk’s bio read: “A tech outsider who makes the impossible possible and cars and “He revolutionized rockets.”
For a while, many Musk fans were happy with either version of the world’s richest man. The theory was that even if he messed up somehow on Twitter, that shouldn’t diminish his accomplishments at Tesla and SpaceX.
Give the guy a break.
Reed Hastings
former Netflix CEO
Musk is “the bravest, most creative person on the planet,” said former Netflix CEO Reed Hastings in November 2022. And this, a month into Musk’s chaotic tenure at Twitter: “Give the guy a break.”
Since then, Musk has seen advertisers flee. He watched the value of his $44 billion investment collapse. And at the same time, Tesla investors no longer seem to be so forgiving.
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Since Musk took over Twitter – after failing in his attempt to back out of a signed deal to acquire Twitter – Tesla shares have fallen 4.7 percent. During the same period, the S&P index rose 49 percent
Meanwhile, Musk still has many, many fans – some of whom are pretty serious tech investors, like Benchmark’s Bill Gurley – who believe Musk’s approach to self-driving cars will end up being much better and cheaper than Uber’s and Waymo.
Is Tesla stock undervalued?
If that proves true, the theory goes, Tesla will ultimately own a huge market. Which means the stock is actually undervalued.
Maybe this will come true in the end! I’m definitely not making any investment recommendations here. It just seems that investors aren’t quite as forgiving when it comes to Elon Musk’s predictions as they once were. And maybe there’s a reason for that.
Read the original article in English Business Insider US.
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