Elon Musk or the permanent bend

It was just over six months ago, an eternity. On February 6th, Elon Musk succeeded in getting the world's most powerful rocket, the Falcon Heavy, off the ground, and instead of charging a sham charge for this test fire, he put him into orbit … a from his car's, a Tesla Roadster. Coup the com & # 39; unheard and new praise concert in the world press for the American entrepreneur.

A new reason to celebrate without measure the one who is one of the pioneers of the electric car (Tesla), the man who revolutionized the space industry (Space X) and dreams of taking the man on Mars, who wants to dig tunnels among the cities to get rid of traffic jams (The Boring Company), or still – among other projects – wants to connect the brain with machines (Neuralink). Las. The same Elon Musk, 47, now trying to describe the most violent crisis of his already long career, even if it is rare as always? – for the boss of a large company. What happened? Back on a murderous summer.

On 7 August, Musk Wall Street veiled a tweet in which he said he wanted to remove Tesla from the stock market in order to overcome the pressure of the financial markets. Since then, no day or almost without disclosures or questions about the future of the electric car manufacturer, its board, the investigations that have been initiated by the US market regulator, the future of Tesla's founder, or even his mental health .

Tuesday, the "Wall Street Journal" revealed that several suppliers of the car manufacturer began to doubt its ability to meet its obligations. It is clear that he has to pay his bills. And then, another thunderbolt in the night from Friday to Saturday in California: in a statement written in the first person and published on the site of Tesla, Musk explains that he finally abandons his plans to leave the exchange. From the beginning of Mea Culpa he acknowledges that such an operation "would be even more time-consuming and disruptive than initially planned". Instead of being a solution to the torments that his company is experiencing, this project could have become an additional problem for Tesla. Who does not need it?

"The past year was the most difficult and painful of my career. […] It was horrible. "

This is what Musk himself recognized in a surrealist interview that was presented to the "New York Times" on Thursday, August 16, during which he, according to journalists from the American newspaper, between "laughter and tears".

The failure of the car of the people

The source of all these torments is a car presented in March 2016 and sold from $ 35,000, the Model 3. While Tesla has long been only very high-end sedans on the market, it produced a few tens of thousands of copies per year, would Model 3 enable the manufacturer to reach the largest number. The way for Musk to show that his vehicles are not reserved for a few little happy happy, with what the modern and electric version of the Ford Ford Ford T from 1908 wants to be.

The funds also show that he manages to produce both cars and other car manufacturers and to silence those who accuse him, above all, of being a great communicator instead of an industrial one. Like Carlos Ghosn, the boss of Renault-Nissan, who did not remember him in the middle of 2017 for the old students of the Insead:

"Musk is a super-seller, you have many stories about other dinosaur manufacturers, but look at the numbers: last year 93 million cars were sold all over the world, Tesla sold 75,000, and the dinosaurs made tens of billions of profits and Tesla zero profit. "

In order to meet the enormous expectations of the Model 3 – 325,000 times ordered in the week following the presentation – Musk initially wanted to produce 500,000 in 2018. An ambitious goal that the group no longer has has no longer looked down , so that the financial markets' attention is increasingly being tormented every day by the number of cars that actually leave its assembly plant in Fremont, California.

And if Tesla had one of his recent commitments and made 5,000 Model 3 in the last week of June in a weekend, then this would cost a considerable amount of energy and many adjustments in the process industrial sector, particularly by relying more on workers than on robots. To try to keep pace, the manufacturer has even mounted a third line of emergency assembly outside the factory and protected by a giant tent. So many adjustments that inevitably weigh on the production costs of each vehicle.


Rare confession in the big companies where the slightest sign of weakness is forbidden, Musk told the "New York Times" to work 120 hours a week (17 hours a day) and to use sleeping pills for sleeping:

"ByI do not leave the factory for three or four days without going outside. & # 39;

If the pressure on Musk is so strong, it is because he has been the favorite of the financial markets for a long time. Even today, the company's market capitalization – that is, the value that investors give to the company – is greater than that of the American General Motors or Ford. For a manufacturer that posted only two-quarters of the profits in its history and sold just about 100,000 cars last year, which sells General Motors in five days …

Is Elon Musk a superhero or a simple person?

The disadvantage of this stock market craze is that many rate the price of the Tesla share too high and bet on its future downfall – we say "shorter" in the financial language. Speculators who have every interest in shaking the slightest doubt about Tesla, to make the slightest inconvenience, to talk about financial bubble, to eventually drop the title Tesla and win their bet.

These "short sellers" (they sell an action that he does not have now, hoping to be able to buy them at a low price later on) have become his Musk's pet peeve, who speaks of them as "torture":

"They try to receive a message at the expense of everything that could lead to the destruction of Tesla."

An extraordinary plan

hence the plan was unveiled by Musk on 7 August to try to get out of the stock market, and thus out of sight of these sellers in public, by buying Tesla shares with a group of befriended investors. Except that his project quickly came into a pool of doubts about its feasibility. So much so that it is the credibility of Musk that is affected. Until the withdrawal of this plan was inevitable. Why?

  • Because Musk should have accumulated a lot of money around him – some analysts have calculated that he should have "raised" $ 35 billion.
  • Because one of the investors presented by Musk as one of its supporters, the Saudi state fund PIF has distanced itself by announcing that it could invest in a competitor, Tesla, Lucid Motors started up.
  • Because we heard of the circumstances in which Musk had sent his tweet – one morning driving his car to the airport to go to his battery factory in Nevada, without anyone, especially not directors of the group, do not know. What gives arguments to those who spoke about a plan that was prepared at a corner of the table and denounced the unpredictability of Musk. As a result, Tesla's share price has since fallen by 15% since the tweet on 7 August, reaching the fortune of a few short sellers.
  • The SEC, the American gendarme, has therefore opened several investigations. To shed light on the circumstances in which the tweet was sent – and especially why Musk said the financing of the operation was insured, while that was not the case. But also to verify that Tesla did not deliberately mislead the markets by communicating about production goals of Model 3 that the group was too ambitious.

Visionary, despot, risk-al … Elon Musk, stronger than Steve Jobs?

Meanwhile, the Tesla administrator was luring the American press that they were looking for a number two to support and enlighten Musk. Some of them excused themselves, of course under anonymity, for their dependence on sleeping pills, the hectic use of social networks or their uncontrollable nature. – in May he refused to answer brutally to financial analysts, their questions were considered "dry" and "annoying"; at the beginning of August he tweeted "Damn, he it turns out that even Hitler shortait the title Tesla … "

The underlying message that the board tried to pass on? Musk is not the only one, he is well surrounded and the management of Tesla is no worse than that of other big listed companies. Because if the founder's personality, which still holds 20% of the company, has been the car manufacturer's main asset for a long time, the day-to-day behavior can also be extremely damaging to the company. Hence a narrow line where the council both tries to keep the aura of Musk while he shows that he is under control.

This is how you should interpret the fall of Friday night. According to the official statement, it was Tesla's founder who made the decision not to free his company from the stock market after studying his project extensively, especially with the help of banks Goldman Sachs and Morgan Stanley – to show that the biggest names on Wall Street continue to follow him. And he is the one who would have suggested his advice to stay there, a downturn that was validated by the administrators. That is to preserve Musk's reputation. But the way the news was announced shows the desire to standardize the company. This time, no tweet swung in the middle of the day, the guns of financial communication are respected: a perfectly calibrated statement and broadcast after closing the markets on a Friday night, a story that investors have time to process information before reopening from trade shows on Monday morning. History to show that Tesla, despite his founder, can also be a company like the others.

Clément Lacombe

the Obs

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