How did it all go so wrong between Musk and Wall Street? On a day when investors in his stock should be celebrating his promise to give them a quick profit, most just don’t believe him. The FT’s front page lead story mused that Musk might have been making a joke all along, with the $420 an all in-joke reference to April 20, a day celebrated by marijuana smokers.
After all, over the past 15 years investors have injected billions of dollars into funding the Tesla dream, a company which has yet to make a profit.
The relationship had been on the slide for a while because of missed forecasts, but that slippery slope got a good oiling in May when Musk threw his toys during the official Tesla’s earnings conference call with analysts and then indulged himself for half the call focusing all his attention on the deliciously named YouTube vlogger Galileo Russell who posed one sycophantic question after the other. It was enough to give pause to any investor.
But the pro’s looked beyond that public meltdown. And cared less when Musk belatedly apologised three months later.
Among those who believe Musk’s biggest asset is his hype machine is Steve Eisman, one of the stars of Michael Lewis’s superb book The Big Short. Eisman among the handful of Wall Street iconoclasts who saw through the Collateralised Debt Option bubble that sparked the Global Financial Crisis in 2008. Eisman and his band of brothers sold CDOs in huge volumes at a time when everyone else inflating the bubble to its eventual bursting point. Eisman thinks Tesla is a bubble waiting to burst.