Once hailed as the ultimate 21st-century disrupter, many analysts now see Tesla as something of a ‘debacle’ and facing a ‘code red situation’
New York — For Elon Musk and Tesla, the blows from Wall Street came one after another this week — a relentless barrage that left the stock so beat up that some now wonder if it can ever regain its status as the ultimate 21st-century disrupter.
This investor panic could fade, of course, and go down as just more evidence of Tesla’s famous volatility Musk himself added to the gloom and doom last week when he told staff in a memo that even with a recent $2.7bn fundraising in markets, the company risked running out of cash in 10 months without “hardcore” cost cuts. Then came renewed attention on a fatality in a Tesla operating on its Autopilot — part of the company’s push into autonomous driving.
What caused the crash? The cracks started showing up early in the year: a decision to cut prices, Musk’s warning about a “difficult” road ahead, and fourth-quarter profit that missed estimates all fueled concern that demand was waning for its cars. But the fears finally burst open after the company reported a massive loss for the first three months of the year, along with a sharp drop in sales.
Tesla also failed to excite market enthusiasm with its sudden decision last month to pivot towards becoming a robo-taxi company, running a fleet of self-driven cars. Musk has said Tesla’s autonomous technology has the potential to make it a half-trillion-dollar company one day.
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