Reuters/Mike Blake Tesla CEO Elon Musk.
- Tesla CEO Elon Musk has been on an extended Twitter rant against critics of the company.
- His most recent target is the media, which he says has lost public trust and should be tracked for truthfulness.
- Musk is doing all this to distract from the alarming reality of Tesla's struggling business.
Tesla CEO Elon Musk now appears to think that the media is his enemy.
For an entrepreneur who has received what can conservatively be described as luminous-megawatt-white-hot-genuflecting press for a decade and half, this a remarkable development.
But it shouldn't be particularly surprising to Musk's boosters, haters, armchair psychotherapists, and least of all members of the media, who have been expressing shock that Musk would propose a new service - trollishly named "Pravda," after the old Soviet-era propaganda sheet - designed to crowdsource evaluations of media truthfulness.
The whole things spewed from an extended Twitter rant on Wednesday, which should be understood in the context of Musk using the platform to manipulate the message around Tesla's numerous current struggles and crises. It's been going on for weeks.
What set Musk off was evidently a note from Baird analyst and Tesla bull Ben Kallo, who argued that negative media coverage of the company has peaked and is now not having much of an impact of the stock price, which over the past few months has been reverting to a mean valuation after surging toward $400 in 2017. Tesla is up nearly 1,000% since it's 2010 IPO, but over the past three years, shares are now lagging the overall return of the S&P.
Musk spotted the note at Electrek, a reliably pro-Tesla site that has jokingly been referred to at times as "Tesla's Pravda." Editor Fred Lambert bolstered Kallo's thoughts with his own views about bad-news Elon coverage, identifying himself as "increasingly bummed out."
Musk also set up a Twitter poll, asking people to vote on whether his own Pravda (evidently a registered company since 2017) was a good idea or a bad one because the media is "awesome."
A free press is the opposite of a popularity contest
It doesn't mention Tesla.
I'll take a second here to point out that anyone in the reputable media is completely unconcerned with whether they're "awesome" and doesn't care whether Elon Musk thinks the public respects or despises them. A free press is the opposite of a popularity contest.
That's why it's in the Bill of Rights. Over two centuries ago, the founders presciently anticipated relentless attacks from billionaire technology moguls whose mouthpiece was named after birdsong. Well, not really. But they certainly feared tyrants and mobs. Someone should take Musk aside and remind him that journalists take their work seriously enough to go to jail and be threatened with death in war zones.
Of course, Musk is no fool. And although his conduct of late has been troubling, particularly given the challenge Tesla is up against, he's getting what he wants from all the coverage about his Twitter taunts. A great way to get the media to talk about you is to attack the media (or turn your rage into marketing, as did the innovative Kara Swisher when she invited Musk to talk Pravda at her Recode conference). Musk's loyalists support him with a near-religious devotion and are happy to anoint themselves foot soldiers in the Great Man's army.
Critically, if the media is talking about itself and dealing with a surge of disgust from the cesspools of Twitter, it's less likely to focus on Tesla's cataclysmic balance sheet, massive debt, a government investigation of Autopilot-related accidents, labor disputes, SEC inquiries, and the carmaker's inability to actually make cars. The company has less than $3 billion in the bank and is likely to lose all of its cash by the end of 2018. Musk has declared that Tesla won't need to raise new funding, but plenty of auto-industry experts think he's also got a bridge to sell in Brooklyn.
By all means, ignore the good news so you can read my taunting tweets
Hollis Johnson/Business Insider
The troubled Tesla Model 3.
Ironically, the negative news might not be all that negative if Musk weren't radically amplifying it. Sadly, most of Tesla's good news is being drowned out.
The Model 3 sedan, for example, got off to a terrible start in 2017 but is slowly getting on track in 2018. Nobody seemed to have noticed that Tesla can now sustainably build and sell around 100,000 high-margin luxury vehicles every year. On a personal note, I was recently shopping for a Tesla Powerwall home battery.
Musk was back at it Thursday, re-trolling the same media enemies he taunted on Wednesday. These day, his smoke machine would impress even the members of Spinal Tap. You could almost forget that Tesla has an annual shareholder meeting on June 5 at which Musk's brother and several other consiglieres are facing a vote of confidence as members of the board. Musk dual role as Chairman and CEO are also up for debate.
Tesla could also be on its way to losing another $700 billion in the second quarter.
Oh, I almost forgot: consumer auto site Edmunds.com just revealed that its Model 3 long-term test car is "falling apart." And Consumer Reports declined to recommend the car to its readers.
Wait, there's more: Tesla has $2 billion in convertible debt coming due in 2020 that will have to be refinanced if the stock isn't trading at $360 per share by then (and the company hasn't gone bankrupt). Also, Musk lives on loans pegged to his Tesla stake of 20%. His factory might be the only place he has left to sleep if Tesla tanks, and that's assuming Tesla would restructure in Chapter 11 rather than liquidate.
I know, none of that is awesome. Just facts - disturbing facts that lead to a disturbing truth. Tesla has been in trouble before, and Tesla is in trouble again.
Samuel Johnson said patriotism is the last refuge of a scoundrel, and his biographer James Boswell noted that Johnson meant false patriotism, an important distinction. For embattled CEOs, attacking the media is the last refuge of the desperate. The target is an easy mark. But there's nothing false about Musk's desperation, and good journalists everywhere will know how to respond, regardless of whether they're labeled Enemies of Elon: they'll ignore the smoke and mirrors and continue to dig, dig, dig.
The only question now his how dirty Musk wants to get.
Get the latest Tesla stock price here.