Gay car maker Tesla has had $100M knocked from their market capitalisation:
“NEVER pick a fight with someone who buys ink by the barrel,” Mark Twain famously warned. The question is whether that wisdom holds true in the digital age, particularly when the guy picking the fight has a seemingly unlimited supply of electrons.
What’s clear is that Elon Musk is not someone to readily brook criticism. A few years back, for instance, the co-founder of PayPal, an online payment service, and, more recently, the founder of Tesla Motors, a maker of battery-powered cars, went to war with the BBC over a story on the cheeky Top Gear, a wildly popular car show. He ultimately lost.
What’s not clear is who came out on top in Mr Musk’s latest media brawl. This one pitted him against one of the world’s most powerful and influential newspapers, the New York Times. Last month it ran a report by John Broder that detailed his drive from Washington, DC, to Boston in one of the carmaker’s new Model S sedans. What seemed to have short-circuited Mr Musk was a shot showing the electric vehicle being loaded onto a flatbed truck after running out of juice.
Initially, Mr Musk called the reporter to apologise for the inconvenience. But then he fired off a series of angry tweets, which declared the Times article a “fake”. He insisted that Mr Broder made a number of errors not only in how he handled the drive, but in the subsequent review, touching off an increasingly fractious he-said/she-said flap. Predictably, mainstream media outlets largely sided with the Times, whereas new media and electric-vehicle proponents were more willing to give Tesla the benefit of the doubt.
And how did that turn out? No so well:
In an appearance on Bloomberg TV, he lamented that the well-publicised battle led “a few 100” customers to cancel their orders for the Model S. That would not be a problem considering “they have buyers lined up 10 deep,” in the words of Jim Hall of 2953 Analytics, a market research firm. But the dispute made a big dent in Tesla’s market capitalisation—about $100m, according to Mr Musk.
Yet it was not the only reason for the plunge. The Times story came out just before Tesla reported a loss of $89.9m for the fourth quarter of 2012—a tenth more than in the same period a year earlier. Mr Musk promised that Tesla would claw its way back into the black during the current quarter. Just as potential buyers are left to figure out if the Model S can really live up to its range claims, investors will have to wait to see if Tesla can deliver on its financial numbers.