Tesla has been wowing us with technological leaps and bounds in the EV sector since 2006 when their Roadster debuted to at an invitation-only unveiling. Since then, Tesla has been driving the plow through uncharted territory, in both the all-electric and the autonomous sectors; Tesla is full-steam ahead, with a load of momentum. But what does Forbes think about all this?
Amidst the accolades and innovative advancements is underlying turbulence that few can help but notice. Amongst those few, Bloomberg, Forbes, and The New York Times have all blasted the Tesla wheelman with enough bad press to take a hiatus in. But bad press is just a part of big business, right?
That’s up for debate. The New York Times put him in the spotlight, in their 2018 article, after he composed a highly ambiguous tweet – one that turned out to be potentially incriminating (despite its seemingly-harmless nature).
This in itself seems like no big deal to the vast majority of us. But the Securities Exchange Commission takes things like this between the lines; apparently, there are potentially serious ramifications for making statements of this nature on social media, without paralleling it with the proper formal paperwork.
The argument takes shape as shareholders without direct access to the disseminating platform could argue they weren’t appropriately notified about the buyout that was seemingly only publically announced on the Twitter platform.
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The assertions in his tween were just as damming in the eyes of Columbia Law School professor, John C. Coffee Jr. “That’s a clear factual statement” recounts the August 2018 New York Times article, “If it’s not fully secure, that’s potentially a very material misrepresentation and a violation of Rule 10b-5.” For the rest of us dummies who don’t know what that means, it’s fraud.
Was it intentioned or distributed as such? I doubt it. The fact that his tweet did cause a 10% shift in Tesla stock, however, didn’t help his case very much. But Elon has been digging holes for himself on more fronts than just his social media account.
A tweet can be interpreted (and subsequently twisted) any number of different ways. Although Elon is far too smart to get away with the “none-the-wiser” guise, you’d think it would take a sheer stroke of genius to keep Tesla afloat, had you been keeping abreast with the Forbes coverage of the California-based electric car company.
An August 2018 article called for a “focus on the balance sheet,” as the business journal scrutinized Tesla’s push to produce 5,000 Model 3s in a week. You’d be inclined to think that Elon should be able to run his company as he sees fit, but the extensive employee roster that has cycled through the Tesla doorway is indicative of a struggling company.
In 2010, Tesla employed 899 workers. As of May 2018, that number floated around 40,000. The ambitious Musk is aggressively pushing his electric semi-truck. Everything you can see, from the outside, is a stellar beacon of hope for the future – the Tesla brand has given us a clear and succinct taste of what an electric future could look like (and it’s really not nearly as bad as Toyota envisioned it).
But, if you read between the press reports; if you dig a little deeper – beyond the hype and the hooplas – what you may find is a distressed company; one that’s on a roller coaster of a ride right now. Tesla has had to lay off nearly 9% of its workforce at one point; is reported to be burning through over $7,400 a minute (according to Bloomberg), and despite hitting the 5,000 car/week, Model 3 goal, still struggles to find a balance between production and revenue per employee. (By comparison, GM and Ford realize about two and a half times the revenue per employee that Tesla is currently able to.) The young Tesla has also come within hours of being bankrupt.
Every company has its challenges; a groundbreaking innovator, such as Tesla, should reasonably be expected to run into its share of troubles. Whether Elon is doing it “right” (or not) is a tentative question. He’s still making cars, so that’s one plus. But if Tesla is to survive like a real business, they need to find their stride, and quickly – before the burden of debt begins to drag Tesla back down to the green earth it came from.
It should also be noted here that, despite Tesla’s close run-ins with trouble, it seems to continue to press forward. Many mainstream media outlets and industry “professionals” doubted whether or not the EV company was going to make it through 2018. Tesla is no stranger to adversity, and the undertaking to integrate a Henry Ford-element of production into new technology, like EVs, is about as brave as you can get can get. The stakes are high, but Elon might just be crazy enough to see it through. Only time will tell.