Tuesday’s session on Wall Street ended with a predominance of bears. Another bad session was recorded by, among others Tesla, which lost more than 11%. It was the electric car maker’s ninth out of ten down session.
Tesla shares are down about 65% since the start of 2022, down 73%. since November 2021 and are approaching the largest annual loss in history. Why this is happening, was explained in the “Światopodgląd” program in TOK FM by Dr. Tomasz Makarewicz, junior professor at the University of Bielefel.
Agnieszka’s interlocutor Lichnerowicz he admitted that there are several reasons for the situation. – As is the case with any plane crash, there is not one cause, but a combination of several, which unfortunately occurred all at once – said Dr. Makarewicz.
The expert pointed out that most shares on the stock exchange fell by about 30-40% compared to last year. – Companies in the TECH sector, i.e. the technological giants of the Internet, have lost a lot. While Tesla isn’t an Internet company in the strict sense, it has caught on with the general trend of technologies that are the future of the world, he said.
As noted by a professor from the University of Bielefel, the general trend was also aggravated by the specific problems of Tesla itself, which lost relatively more than other companies. – Musk has always been good at building an image. He has built a cult around him. People treat him not just as another more or less resolute entrepreneur who has managed to enter a niche market, but as a new messiah – explained the host of TOK FM.
At the same time, Prof. Makarewicz revealed that upon deeper analysis of many of Musk’s plans, he became skeptical of him, because these plans turned out to be “not fully thought out.”
– It’s not like he likes to think about things. Many of his ideas fail, said Tomasz Makarewicz.
The TOK FM host recalled that Musk created Tesla as a brand of the future, which at one point “had a larger market capitalization than the next 10 automakers (like VW or Ford). Over the past year though, , Tesla has dropped dramatically, so this market cap has shrunk dramatically”
– The problem was that Tesla never made enough cars to justify the company’s value. The value of this company has never been profits, i.e. revenues minus costs. Only what investors think this company will produce in the future – said the host of the “Światopodgląd” program on TOK FM. And he added that, in his opinion of him, “these investors always had a feeling that Musk at some point was going to start mass production of these Teslas, which he failed for another year.”
“Musk is not considered a car salesman, which he is, but a visionary”
Another problem of Tesla, underlined by Agnieszka Lichnerowicz’s host, is that Musk from the very beginning “is not considered a car salesman, which in fact he is, but a visionary, because he offered not just a car, but a number of services worldwide machine.” – And it didn’t work. Musk has a tradition that every year he announces that next year he will succeed and every year he fails – added Prof. Makarewicz.
On the other hand, failure to deliver on promises and grand visions causes a subsequent drop in investor confidence. – When someone announces something once, twice, third time, we start to wonder if this person can be trusted. And here is the hype around Mask Falls – explained the specialist.
“The hype around Musk is a giant balloon that’s just air and nothing else”
Another important point is that Musk “wanted to organize his whole life around Tesla,” which is not entirely possible in many parts of the world.
– The problem is that it could be organized United States of Americawhere the antimonopoly law is weak. In Europe, however, this business would have to be “shredded” very quickly and would therefore lose its raison d’etre, explained the expert. And he added:-I think that’s what investors started to realize that all this fuss around Musk is a giant balloon, in which there is only air and nothing else. There are no promised profits – explained the TOK FM interlocutor.
The drop that tipped the scales of bitterness and Tesla’s stock dropped another one as much as 11 percent was the report from Reuters and “The Wall Street Journal” that the company was extending the suspension, according to Tomasz Makarewicz of production at its Shanghai factory since due to an increase in the number of COVID-19 cases among the crew. – Another deadline postponed by Musk was already too much. Especially that people are now afraid of what will happen to the epidemiological situation in China, which does not look rosy – the TOK FM host said.
Professor Makarewicz also pointed out that investors hadn’t fully realized that Tesla was not just Musk, but a large company employing many talented engineers.
– We saw Musk himself on Twitter. And suddenly we realized that Tesla relies on this Musk to advertise on Twitter. However, he is surrounded by a ring of people who act as fuses and make sure that his stupid ideas don’t spill over into the company. I mean, he makes a fuss on Twitter, but then there are people who mediate and can properly adjust expectations, conditions, etc. – summed up the interlocutor of Agnieszka Lichnerowicz.
