Tesla drives between wealth and doubt

Elon Musk visits the construction site of his factory in Grünheide, near Berlin, on September 3.ODD ANDERSEN / AFP

Elon Musk, CEO of the rocket company SpaceX and maker of electric cars Tesla, looks like a character from playwright Tennessee Williams.

It is a universal encyclopedia of the depths of the American soul.

Talent, vulnerability, despair, loneliness, success, individuality, perseverance in the pursuit of a love, an obsession;

an idea.

Musk, 47, has been pursuing his electric car revolution for 17 years.

And like the writer's protagonists, he pays a price.

He works 120 hours a week, hasn't taken a week's vacation since 2001 (when he fell ill with malaria), sometimes remains locked up for four consecutive days in factories solving problems, almost missed the wedding of his brother, Kimbal, in Catalonia, when he was the godfather and takes Ambien to sleep.

His mental health, he frankly acknowledges in

, “is not very good right now.

I have friends who are really worried, ”he admits.

The concern, as the newspaper reveals, about his work overload has reached the board of directors.

A couple of years ago the company spoke to Sheryl Sandberg, Facebook's second executive, but there was no agreement.

The council is looking for a lieutenant to ease the tension of Musk, whose erratic behavior is unpredictable.

He denies the search.

In spite of everything, the market supports him.

"As CEO he is a game changer, and while he has been unorthodox, many investors prefer him to lead the company," observes Brad Gastwirth, chief technology officer at Wedbush Securities.

But will Musk endure or will he break like a Tennessee Williams character?

“I thought the worst was over.

I really thought about it, ”he admits in The New York Times.

“The worst is over for Tesla from an operational point of view.

However, from a personal suffering point of view, the worst is yet to come ”.

Investors have another view.

On August 7, on his way to the airport in Los Angeles, he tweeted from his Tesla Model S that he could privatize Tesla at $ 420 a share.

The fire was immediate.

No one on the board knew he was going to make that tweet, the title soared 11% and the Securities and Exchange Commission (SEC) asked the company for an explanation.

Musk had a justification, the huge amount of short positions opened by speculators - which he has complained about since 2017 - makes it very difficult to manage the long term of the company.

Short sellers have gone as low as $ 20 billion in debt to bet on the downside.

The highest amount ever seen in this strategy.

So on July 31, Musk met at the San Francisco Bay Area factory with Yasir al Rumayyan, CEO of the Saudi Arabian sovereign wealth fund.

Tesla's CEO wanted to get the Arab country to finance the privatization.

But they were not willing.

"Can the Saudis afford an expensive shopping party right now, with the price of oil so low?" Asks Susannah Streeter, an analyst at Hargreaves Lansdown.

Quarterly profits at Saudi oil giant Aramco have fallen 73%.

In addition, the Saudi fund and its $ 325 billion have already been looking for "bargains" with the pandemic.

"Tesla has a dazzling valuation of 346,000 million and taking a significant stake requires a lot of nerve," warns the expert.

Another option could be to use SpaceX to finance the privatization of Tesla.

Space is no longer a border.

On August 11, the market value exceeded that of Toyota and Ford combined.

Nothing matters that it controls only 0.8% of the sector.

For now, customers have a deep emotional bond with their vehicles.

According to the consulting firm JD Power - which measures the attractiveness of the brands - Tesla got 896 points out of 1,000, better than any brand.

Next up was Porsche, with 881. In fact, the Tesla Model 3, describes industry analyst Matthias Schmidt, “was the best-selling pure electric car in 2019 in Western Europe, with 94,000 requests.

Double that of the next one, the Renault Zoe (45,700) ”.

It does not matter that Tesla has not had any full exercise benefits.

The numbers sound like wheat tossed in the wind to experts.

Standard & Poor's (S&P) estimates that its $ 8.6 billion cash in the second quarter gives it "great flexibility" to finance its ambitious expansion.

But the firm did not get a pass in the revision of the S&P 500 index a week ago, which plummeted the value.

Expansion

The Fremont plant (California), where the Model 3 and Model Y are assembled, can go - according to S & P - this year from 400,000 to 500,000 units.

On the other side of the ocean, its

in Shanghai could produce each unit at a lower price, the plant in Berlin (Model Y) is a Trojan horse within one of the largest European markets and the company has announced the opening of new facilities in Austin (Texas), where it will build its truck (Cybertruck).

Musk has commented that the plant will be "an ecological paradise" that will be "open to the public."

But the head of Tesla does not descend those waters alone.

Europe has joined the electrical competition.

“This year thanks to tax incentives for electric vehicles, in certain markets, where before the choice was more or less Tesla or Tesla, many more models will be offered,” reflects Schmidt.

Undoubtedly, electric companies are going to benefit from tax aid for the green change.

"The days when the firm dominated electric vehicles on European roads are over," he says.

Volkswagen and the alliance between Nissan and Renault sold more cars on the Old Continent this year than Musk's company.

Tesla jumps the potholes of the market like a cat on a hot tin roof.

'Tulipomania' on wheels

It seems more likely that Tesla's stock will reach Mars sooner than its rockets.

Since the company made its split effective on August 31, the share has risen and fallen the Alps.

If that day it closed at $ 498 per share, last Friday it closed at about 370. However, a kind of tulipomania (speculation on the prices of tulip bulbs that was lived in the Netherlands in the seventeenth century) has been investor proxy.

About half a million Americans trade the value with just the Robinhood app.

Crazy.

"The stock can certainly go higher, but it is driven more by retailers than by institutional investors," warns Brad Gastwirth of Wedbush Securities.

Does not matter.

Despite Tuesday's 21% drop (due to not being included in the S&P 500 Index), stocks have nearly tripled in value since January.

And the lights continue to illuminate the scene.

“Musk is the lead actor in the greatest soap opera that has ever been seen.

It builds sunroofs, rockets, cars, and it's a controversial bet, but it delivers, and we've never seen so much short-term interest like now, "Bob Sloan, founder of S3 Partners, told Bloomberg.