It Seems Many Wall Street “Experts” Don’t Understand Tesla’s Elon Musk

Elon Musk

AUG 16 2018 BY EVANNEX 42

WHY THE ‘EXPERTS’ DON’T GET ELON MUSK

As the saga to take Tesla private continues to play out, Elon Musk continues to befuddle so-called ‘experts’ on Wall Street. Both Musk and his electric car company, Tesla, don’t fit neatly into their narratives. Inc.’s Geoffrey James says, “I’ve been working in business journalism for over 20 years and I’ve never seen any high tech leader who creates such a polarized reaction as Elon Musk.”

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Matt Pressman. The opinions expressed in these articles are not necessarily our own at InsideEVs.

Above: Some background on Elon Musk and his companies (Infographic: The Street); Editor’s note: Numbers variable based on recent reports/filings

On the one hand, Musk has a Twitter following that rivals most rock stars. On the other hand, the financial media runs a seemingly endless smear campaign against Elon and Tesla. James writes, “The public loves the guy but the financial experts can’t stand him.”

As Tesla’s CEO, Musk is a disruptive force. His leadership style is far from conventional. After all, “Musk plays the long game; the experts see the short game…  It’s hardly a secret that most financial [pros] have a very short window. To them, it’s the stock price that is all important, sometimes that’s because (literally) they’ve shorted the stock.”

Why? According to James, “Many ‘experts’ compare Tesla to GM, probably because GM, in the Bolt, already has a viable all-electric vehicle. Their preferred narrative is that GM [and the Japanese and German car makers] will use their deep pockets to capture the all-electric market. Under this scenario, Tesla is simply a modern-day version of DeLorean, destined to go out of business and then be featured in the 2027 reboot of Back To The Future.”

Above: A pair of Model 3s at Tesla Supercharger station (Image: CleanTechnica)

Then, there’s the technology angle. James notes that “other experts compare Tesla to Apple because Tesla is building a seamless union of hardware and software, along with infrastructure of charging stations to support the union, much as Apple built the iTunes environment for the iPod/iPhone/iPad family… [perhaps] Tesla is destined to get clobbered in the mass market just like Apple got clobbered in the late 1980s and early 1990s.”

Furthermore, “some experts compare Tesla to the software firms of Silicon Valley under the logic that those companies are ‘disruptive’ and Tesla is (or is trying to be) ‘disruptive’ and therefore they’re similar. Under that scenario, Tesla is just another hype-factory like Theranos… as if making an overenthusiastic forecast for a real, existing product was the same as committing fraud.”

James concludes, “all of those comparisons, however, aren’t very apt. In truth, there has never been anything exactly like Tesla, ever. It’s not a car company, it’s not a consumer electronics company and it’s not a software company. It’s all of those things and more, and that leaves the ‘experts’ confused and struggling.”

Above: Fellow billionaire Mark Cuban weighs in on Tesla and Elon Musk (Youtube: CNBC Television)

Looking to the future, Musk is making a bold move to take Tesla private. His confidants say he’s relentless in his never-ending push for progress. Meanwhile, observers remain mired in ‘analysis, paralysis’ trying to make sense of what’s coming for Tesla. Regardless of how this all plays out, one thing is for certain — once again, the so-called ‘experts’ could be caught flat-footed, taken aback, and left behind.

===

Source: Inc.

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers, free of charge. Our thanks go out to EVANNEX. Check out the site here.

Categories: Tesla

Tags: , ,

Leave a Reply

42 Comments on "It Seems Many Wall Street “Experts” Don’t Understand Tesla’s Elon Musk"

newest oldest most voted
Shnao

The Son of Jesus has come to America.

Get Real

And the new username troll Shnao has unfortunately come here to slime InsideEvs with worthless comment that express fear, bitterness, and insecurity.
I wonder which existing username troll he really is?

JasonB

Agreed. People using dope are usually hard to understand.

Nick

“Using dope”?

Sounds very 80s. 🙂

eject

Poor boy. No one understands him. Clearly those are mitigating circumstances for the securities fraud.

Pushmi-Pullyu

There are no mitigating circumstances for your repeated deliberate attempts to smear Tesla’s good name. It’s pure stock shorting greed on your part.

Will

Who’s smearing Tesla? I didn’t know Musk was Tesla

Ricardo

I don’t even understand you. Seriously. What are you doing here? Go advertise some place else.

antrik

You are you doing here, reading these articles, if you don’t like them? You are not obligated to, you know…

theflew

Funny EVANNEX you don’t mention how he has outright lied about taking the company private. That’s the part Wall Street doesn’t like. He’s says things that are on his mind with no basis in reality. There’s a difference between them talking internally about taking a company private and some news leaks out. Versus the CEO saying they’re considering making the company private and mentioning stock buyout price points. Imagine what that does to the market.

CDAVIS

@theflew said: “…There’s a difference between them [Tesla] talking internally about taking a company private and some news leaks out. Versus the CEO saying they’re considering making the company private and mentioning stock buyout price points. Imagine what that does to the market…”
————

@theflew believes public information vis-a-vis leaks is better than upfront public transparency of Tesla considering going private. So those that have early access to the leaks get to make informed decisions before the general shareholder base… the traditional good-old-boy Wall Street game of insider profiting… yup… I can understand why some traditional Wall Street guys are upset Musk is not playing by their rules.

throwback

” So those that have early access to the leaks get to make informed decisions before the general shareholder base..”

That is by definition Insider Trading. The board and internal directors who trade on non public information would be breaking the law. Also Musk tweeting that he is “thinking” about taking the company private and “funding secured” is information that should not be published in the manner it was. There are rules for publicly traded companies to disseminate information which includes, halting of stock trading and or disclosing this information after market close. That is what has gotten Musk in trouble with the SEC.

Brian

Making announcements after close allows after hours traders to get a jump on the small invertor. Even more unfair.

CDAVIS

@thowback said: “…Also Musk tweeting that he is “thinking” about taking the company private and “funding secured” is information that should not be published in the manner it was..”
———-

Keyword is “considering”.

A CEO tweeting what he is “considering” may not be conventional but likely does not violate any SEC regs and it is well know by now that Musk often tweets what’s on his mind.

Musk has on several past occasions publicly stated he would like Tesla to be private. The $420 reference is basically the ballpark standard range premium so no big secret there and “Financing Secured” serves to invite others to compete against what Saudi Fund has offered… which inviting competition is good thing for Tesla’s shareholders. Yes it can be argued that perhaps “secured” should instead have been “available” or “offered” or some other word but SEC likely will not rule it being misleading.

REXisKing

“he has outright lied”
Keep telling yourself that.
Aside from Cramer disagreeing with you, it’s a clear path to bankruptcy.

CDAVIS

@theflew said: “ Funny EVANNEX you don’t mention how he has outright lied about taking the company private…”
————-

The huge investment the anti-Tesla Jim Chanos Wolfpack has made shorting TSLA has Jim Chanos desperately trying to convince the Wolfpack that Musk (and the Tesla board) is lying about Tesla *considering* going private… unfortunately for Jim Chanos he can’t change what is in fact reality… Tesla is considering going public… and likely will.

Jim Chanos is working hard to keep his Wolfpack from turning their back on him but there often comes the moment when the Alpha wolf is no longer respected by his pack… and left to die alone… loyalty often ends at the door of self preservation.

Kbm3

Consider looking up words that are too big for you.

The word considering does not mean what you think it means.

CDAVIS

@Kbm3 said: “Consider looking up words that are too big for you. The word considering does not mean what you think it means.“
————

“…consider, study, contemplate, weigh mean to think about in order to arrive at a judgment or decision. consider may suggest giving thought to in order to reach a suitable conclusion, opinion, or decision…” source:
https://www.merriam-webster.com/dictionary/consider

Looks like “consider” means what I thought it meant.

Pushmi-Pullyu

“Funny EVANNEX you don’t mention how he has outright lied about taking the company private.”

Are you just trolling, or do you actually believe the latest — and perhaps most laugh-out-loud ridiculous — FUDster conspiracy theory, the one that says Elon tweeted “funding secured” for possible plans to take Tesla private, when he hadn’t even talked to anybody about funding?

It appears some people will swallow any bull pucky, no matter how bad it smells and tastes!

nix

This story was written on July 9th, a full month before Elon tweeted about taking the company private.

“Published on: Jul 9, 2018”

https://www.inc.com/geoffrey-james/why-do-experts-keep-underestimating-elon-musk.html

Why would a July 9th story have any content about events in August? Do any of you guys know how the long established “source” link at the bottom of nearly every story here works?

jelloslug

If you look at the rate of return on most of the financial pundits that make Tesla predictions, they are in the double digit negative territory for their rate of return.

REXisKing

Exactly, People with HUGE EGO’s and not much actually accomplished in life are his biggest critics.

John

What it boils down to is simply one of two outcomes: the success or failure of Tesla. Where I think folks go wrong on both sides is they think it comes down solely to Elon Musk. While his actions and antics have a big impact on the short term stock price, the product is still the product. It’s a very popular product, regardless of how desperate the shorters try to portray otherwise. And the future of the company is no guarantee, regardless of what the company’s supporters believe. When one clears out the white noise and bias, what’s left? The product and the process.

Lou Grinzo

I still contend that the most likely scenario for Tesla in the next 2 to 10 years is for them to be bought out by some company like Google or Apple, that has very deep pockets and a desire to get into EVs/AVs. Musk has done a brilliant job getting Tesla to where it is today; that doesn’t mean he’s the right guy to stay in charge. Put another way, if you’re going to fly to the moon you want your rocket’s first stage to have one set of characteristics, but the second and third stages and the descent engine to be very different.

antrik

Tesla is still very much in extreme growth mode, just like when Musk took over ten years ago. Ten years from now, when the EV market starts settling, and Tesla will be fighting for every bit of margins and market shares like any other car maker, Musk might no longer be the right person. Until then, he is indispensable.

CDAVIS

Article title: “It Seems Many Wall Street “Experts” Don’t Understand Tesla’s Elon Musk”
————-

Or alternatively they understand Musk but despise him because Musk refuses to conform to Wall Street’s traditional template of managing a business to be slave to q/q.

Musk is executing a multidimensional long-game with Tesla same as he is doing with SpaceX.

Had SpaceX also gone public Musk would likely be receiving similar criticism from many Wall Street analysts… and anti-Tesla Wolfpack leader Jim Chanos would be shorting SpaceX telling you that SpaceX is “worthless” and will soon go out of business because the big-boy traditional players can easily duplicate what SpaceX is doing at higher scale and drive SpaceX out of business.

There is a not so small group of institutional analysts and hedge fund managers that do understand and support how Musk is managing Tesla… much of Tesla is institutionally owned by smart hedge fund managers that have profited greatly investing in Tesla and are wanting to continue being invested in Tesla if it goes private. The Tesla naysayers don’t represent all of Wall Street.

Pushmi-Pullyu

“Had SpaceX also gone public… anti-Tesla Wolfpack leader Jim Chanos would be shorting SpaceX telling you that SpaceX is ‘worthless’ and will soon go out of business because the big-boy traditional players can easily duplicate what SpaceX is doing at higher scale and drive SpaceX out of business.”

Good analysis. I think you are 100% correct about that.

MAF

The problem with Elon Musk is that he is playing in a space with very well defined rules (US capital markets) and heavy regulation, but chooses to ignore / break those rules as he sees fit. Then he gets pissy when the establishment reacts by downgrading Tesla and criticizing hm.

REXisKing

Except he hasn’t broken any rules.
Short spin isn’t breaking any rules.
Ask CRAMER.

Will

Same Cramer that was saying the banks were good and invest In the mortgage companies during 00s

Arista

These Evannex pieces are ridiculous. Why not simply create an editorial category on Insideev’s? Then you can have contrary opinions from some source not stoned on Elon flavored Kool aid.

Nick

You can always go to Inside Pollution to get Tesla bashing stories. Inside EVs is more focused on the EV revolution of which Tesla is a substantial part. Thanks!

Arista

Tesla and Musk are great. I’m a big fan. That said “great” is not synonymous with “infallible”.

Get Real

What is hilarious is that for some reason as Tesla gets more and more successful in disrupting the status quo, the troll fest continues to grow more and more shrill with lots of new usernames just suddenly popping up in the last few days like Jason B to reinforce the existing username serial anti-Tesla trolls, shills, shorters and haters here.

Gee, I wonder why that is?

Pushmi-Pullyu

It’s almost like they’re not ready to put on their “big boy” pants. 😉

Looks like I won’t have many more opportunities to use my favorite quote about Tesla’s finances:

“Tesla envy happens when other people have, ahem, long positions and yours is too short.” –Jim Whitehead

nix

Why would anybody hold any great company to the standard of infallibility?

More to the subject at hand, why would you propose there being a different category for positive content about any EV company just because that company is “great” but isn’t “infallible”?

nix

When are you going to learn what the “source” part means at the bottom of the story? There is exactly zero actual content provided by evannx in this story. It is entirely reporting on the work of Geoffrey James over on “INC”.

Do you have an actual argument against the underlying story provided by INC, or are you just going to blind yourself because you don’t like the conduit that brought that INC story here?

https://www.inc.com/geoffrey-james/why-do-experts-keep-underestimating-elon-musk.html

Notta Realname

I feel like this take fundamentally misconstrues Musk’s “unconventionality” as simply being a matter of short-term vs long-term thinking.

As someone with “a Twitter following that rivals most rock stars”, Musk’s public persona matters, and during the last few months he has looked… not good on that front. Both in business decisions that seem erratic or sudden (factory purges etc), and in personal interactions that a cooler head should have been able to avoid (the submarine debacle, the recent Azealia Banks “tweeting about booty shorts on acid” incident).

If your narrative is that Musk – unlike stock market analysts – is thinking in the big picture and the long term, one would expect that he’d also be able to think long-term vis how he interacts with other human beings. Lately, the evidence for that is mixed at best.

TomArt

It really is the difference between short-term and long-term. Our capital markets have become so corrupted/poisoned with the relentless short-term, destructive thinking.

Notta Realname

Oh, no doubt on the markets being unhealthily short-term focused. I’m more saying that Elon might not be that great a long-term thinker either.

Nix

And yet Musk led Tesla to the top of the EV sales scoreboard despite all the disadvantages of launching a new company and a new sales model and new charging network.

Go figure.

Seems like exactly who they ñeed to get the roadster, semi, model Y, pickup etc to market…

Bogdan

Wall street experts are wall street gamblers