It looks like a crash that will make the history books. The electric car manufacturer Tesla is falling lower and lower on the stock market, losing about 70 percent in value since the beginning of the year.
How could Tesla fall so low? The stock market performance since the beginning of the year looks frightening.
One possible explanation is founder Elon Musk’s antics on Twitter, the short message service. Musk bought Twitter for $44 billion and has been putting on a creepy freak show ever since.
So he could destroy the formerly bright-shining Tesla fire, or at least the marketers fear he does.
Because the fire is almost everything when buying a car. And in the eyes of the public, Musk is Tesla, Tesla is Musk.
“Historically incredibly important” is the brand in the automotive industry, according to Forbes magazine. When car buyers are asked what is crucial to them, the brand and therefore the manufacturer’s image comes first. What impression the brand makes – on yourself and on others.
That is why it is dangerous for car brands to be associated with political currents. An irate Tesla shareholder told the New York Times, “I don’t care if someone sells pizza or popcorn or whatever — you never win by involving customers in politics.”
Musk clearly represents right-wing views on his reality show. This evokes reactions on the other side of the political spectrum.
The left-liberal magazine “The Atlantic” ran the headline: “Musk is a far-right activist”. According to surveys, Tesla’s reputation has already suffered a lot among left-wing voters in the United States.
One of the biggest hits on Musk’s show is that he immediately fired half of the employees after buying Twitter. He told those who stayed behind that from now on they would have to work extremely hard, think of nights under the desk – otherwise they had better leave. Which many did.
Musk has unblocked Donald Trump’s account. The ex-president had previously used this to call for the storming of the US House of Representatives. “It’s been going wild ever since!”
Trump wanted to block the transfer of power to Joe Biden, which would have ended American democracy at the same time. More than 100 police officers were injured and four committed suicide shortly afterwards.
Then there was the episode with rapper Kanye West. This was blocked under the old leadership of Twitter; he had agitated against Jews. Musk released his account and happily greeted West: “Welcome back to Twitter, my friend.”
Soon after, West was a guest on an ultra-right talk show, declaring “I love Hitler”, and again agitating against Jews on Twitter – Musk again blocked him.
Or then former president of Russia Dmitry Medvedev tweets wildly about an impending civil war in the US and about Musk being president – Musk called it “epic”, four hours later “absurd”.
And so on. Musk regularly has friendly conversations on Twitter with figures from the extreme right of the political spectrum.
That has consequences. One analyst says Musk’s time as Twitter boss has been “massive brand destruction for him and for Tesla.” In Germany this is a problem for show greats. Satirist Jan Böhmermann has a clear opinion:
How Tesla’s image is changing can be tested in Switzerland with a thought experiment.
It was all approved when Doris Leuthard showed up with a Tesla. “New company car” – this is how it was casually commented by the transport department of the CVP Federal Council. What if Albert Rösti does the same for her? Does it still look so cool when the new SVP head of department also presents himself with Tesla?
The Musk show on Twitter is unique, Tesla is not anymore. This new reality is summed up by German car newspapers: “Elon Musk is worthless? Those are the alternatives.”
There are other good electric cars from dozens of manufacturers, according to the “New York Times,” and names Ford, Mercedes, Kia or Chevy. “The truth is that many of the best electric cars on the market today were not made by Musk.”
A damaged image, more competition – apparently Tesla is already struggling to sell its cars. That is certainly a concern for shareholders. Any sign that this is indeed the case will cause the stock to drop even lower.
Such was the case when it was recently announced that Tesla would have to cut $7,500 in the US. Musk had previously rejected such price cuts. And in China, Tesla even switched to traditional advertising – Musk could always do without that.
Musk’s megalomania of wanting to run several companies at the same time also gnaws at the nerves of Tesla shareholders. Only Tesla should fill its day. Twitter too. And then Musk has the aerospace company SpaceX and two smaller companies.
One explanation for Tesla’s stock market crash should particularly irk Musk: It’s not all about him; what he does and doesn’t do may be of secondary importance.
When interest rates were at historic lows, desperate investors simply pumped the stock to ludicrous heights. At its peak, Tesla was valued at $1.2 trillion. It was worth far more than some of its competitors combined; as much as any Tesla sold for more than $1 million.
Interest rates are no longer at record lows and investors no longer need to make risky bets. What used to be celebrated is now being scrapped. There are well-known mechanisms on the stock market, apparently they also apply to Elon Musk. (aargauerzeitung.ch)
Source: Blick
I am Dawid Malan, a news reporter for 24 Instant News. I specialize in celebrity and entertainment news, writing stories that capture the attention of readers from all walks of life. My work has been featured in some of the world’s leading publications and I am passionate about delivering quality content to my readers.
