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Weekend Read: Elon Musk’s 8 Biggest Mistakes And Blunders

By Investing.com Stock MarketsMar 30, 2019 10:30
uk.investing.com/analysis/elon-musks-8-biggest-mistakes-and-blunders-200207037
Weekend Read: Elon Musk’s 8 Biggest Mistakes And Blunders
By Investing.com   |  Mar 30, 2019 10:30
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Elon Musk's 8 Blunders
Elon Musk's 8 Blunders

Elon Musk, the eccentric billionaire, is one of the biggest names in the business world. Musk, who holds South African, United States, and Canadian citizenship, co-founded PayPal, Tesla, Neuralink, and SpaceX. He’s known for being eccentric and outspoken. His net worth is $21.2 billion, which excuses some of his oddities, but, due to his prominent entrepreneurship, he’s still under the microscope when it comes to his decisions.

His social media presence, for example, has proven problematic to investors. Twitter recently locked him out of his account after he offered Bitcoin to his followers and posted a mildly inappropriate schoolgirl anime picture. Twitter thought someone had hacked Musk, but the company reopened his account after realizing that that was just his personality.

If Musk weren’t a billionaire, his anime obsession and conspiracy theories would be harmless. However, Elon Musk depends on investments to keep his businesses thriving, and behind those investments are concerned shareholders. Elon Musk’s biggest mistakes have affected the stock market negatively. Here’s how:

The Roadster’s Failure to Launch

Roadster's Failure to Launch
Roadster's Failure to Launch

While Tesla is wildly successful now, it wasn’t always that way. The Roadster was Tesla’s first car, and, wow, was it bad. BBC broadcaster Jeremy Clarkson described it as a poorly-run science fair project. At the time, that characterization angered Musk, but he admitted, eight years later, that the Roadster was a huge mistake. There were a lot of technical and scientific reasons the Roadster failed. The technology wasn’t where Musk thought it would be, and the cars essentially self-destructed at their own launch party.

The stock market, predictably, took a dive after the disastrous launch. Tesla barely made it out of the woods, and the company lost money for two straight years. Tesla has managed to make it to fifteen years old, which has surprised even Musk himself. However, it wasn’t smooth sailing from there. Next came the explosion.

The Inconvenient SpaceX Explosion

SpaceX Explosion
SpaceX Explosion

In 2016, the SpaceX rocket launch gave viewers an unexpected fireworks show when the rocket blew up during fueling. Elon Musk took to Twitter to complain, calling the explosion a “difficult and complex failure.” The rocket explosion was actually so bad that Musk thought someone had shot the rocket. He believed, at the time, that someone had gone up the roof with a high-powered rifle and shot the rocket in the precise spot necessary to blow it up. He even requested an FAA investigation into this mysterious gunman.

After finding no evidence to support his theory, he conceded that it was likely his company’s fault. Investors did not take kindly to the failure, and another dip occurred. On the bright side, the event did lead SpaceX to improve its security in case the hypothetical shooting theory ever did pan out.

Reddit’s Ill-Advised Elon Musk AMA

Reddit & Tesla
Reddit & Tesla

People either love or hate Reddit. Some internet denizens think it’s a cesspool, while others think it’s a brilliant way to communicate. There was a time when Reddit deified Elon Musk, but now that’s changed dramatically. Reddit, in what would predictably prove to be a bad idea, hosted an “AMA” (Ask Me Anything) with Elon Musk.

Musk took the opportunity to tell everyone his thoughts on Mars, including plans for colonizing the currently uninhabitable planet. Investors, likely concerned about this new focus, were not on board. Shortly after, tech and data crunching sites noted that Reddit was growing less enamored with Musk. The tone and keywords surrounding the investor had turned more negative, and they still remain that way.

“A Good Chance of Death”

A good chance of death...
A good chance of death...

Generally, when someone announces that their project carries with it “a good chance of death,” they follow that up by saying that they will be discontinuing it. For example, romaine lettuce killed two people, and the CDC yanked all of it from the shelves. However, Elon Musk doesn’t see those odds as an impediment.

He recently stated that there was a “70% chance” that he would be going to Mars, even though it was likely he would die in the process. Colonizing Mars is a cool idea, but most people would rather stay on Earth than risk death with Elon Musk. The stocks took this as another sign of instability and lack of focus from the embattled former Tesla CEO.

Teslaquila

teslaquila
teslaquila

Musk turned his focus, at least temporarily, from making serious scientific inventions to making nonsense. He attempted to brand “Teslaquila,” which is a combination of “Tesla” and “Tequila.” The Tequila Regulatory Council of Mexico objected on copyright grounds. Tequila is a copyrighted word. Tequila has to be made in certain Mexican states to avoid a lawsuit.

Tesla filed for a patent to trademark Teslaquila anyway. This upcoming, unnecessary conflict between Tesla and Mexico over tequila has irritated investors. It’s pointless, signifying a lack of focus, as there is no reason a car company needs its own liquor.

Elon Musk v. Bill Nye

Elon Musk v. Bill Nye
Elon Musk v. Bill Nye

Twitter somewhat worships Bill Nye. Millennials remember Bill Nye the Science Guy as a fun part of their childhood. Bill Nye was a fixture in science classes in America. His videos and fun experiments were way less boring than normal lessons. Bill Nye called Elon Musk’s attempt to colonize Mars “not reasonable.” Most of us already knew that, because there’s no oxygen on Mars.

You’d have to put on a spacesuit to leave your house every day. Also, it’s extremely cold, with no water or food. Nye’s complaints were another thorn in the side of investors. Musk takes a utopic view of life on Mars, which discourages investors.

The Nothing of Tesla

The Nothing of Tesla
The Nothing of Tesla

Elon Musk seems to be feeling some residual resentment over his Tesla forced resignation/firing. He deleted his “titles,” which means that he went onto his own website and deleted the part that called him the architect, chairman, and CEO. He said he deleted this “to see what would happen.”

What did happen was a phone call from the SEC telling him that he still had to list himself as the president of the company. He replaced that title in order to avoid “confus[ing] the authorities.” The battle between Musk and the SEC has alarmed investors. The SEC’s dislike for Musk is only made worse by the fact that Musk does not take the SEC even a little bit seriously.

Musk’s Multiple Messy Divorces

ELON MUSK DIVORCES
ELON MUSK DIVORCES

It’s not fair to say that someone’s bad luck in love necessarily means they’re bad at business. But, skittish investors don’t always see it that way. Musk has been divorced several times, and recently said in an interview that he has to be in love in order to be happy. For investors, it was not so much the divorces as the rumors swirling around them.

There were rumors of infidelity, and he did pay around $16 million in alimony in his second divorce. Investors often worry that personal turbulence will translate into the business world. True or not, these divorces and the rumors surrounding them had an impact on the stock market.

Elon’s Notorious Twitter Rants

ELON MUSK TWITTER RANTS
ELON MUSK TWITTER RANTS

Elon Musk’s next divorce needs to be from Twitter. There was a recent cave collapse in Thailand that trapped twelve Thai teens. British diver Vernon Unsworth assisted in the rescue mission but refused to use Musk’s mini-submarine to help with the rescue. Unsworth claimed the sub was a “PR stunt” that wouldn’t work.

Angry and ready to overreact, Musk decided to tweet accusations of pedophilia about Unsworth. These accusations were unproven, and Musk caught a lot of condemnation for his tweets. Elon Musk stated that he “hoped” Unsworth would sue him. He got his wish when Unsworth slapped him with a defamation lawsuit in late September.

Privatization Controversy: Twitter Strikes Again

ELON MUSK ON TWITTER
ELON MUSK ON TWITTER

The SEC sued Elon Musk over an ill-advised tweet. He tweeted that he was considering taking Tesla private at $420 a share. He claimed, wrongly, that funding was secured. In reality, the stock wasn’t at $420 yet. The SEC hammered Musk for these “misleading” tweets and sued him for causing harm to shareholders.

Recently, the SEC settled with Musk, fining him $20 million. While that might seem like a lot, it was actually less than half a percent of his net worth. Musk also had to step down as chairman for three years. Whether this latter move will settle nervous investors remains to be seen.

Smoking a Joint Live Online with Joe Rogan

ELON MUSK
ELON MUSK

In what would inevitably become a meme, Elon Musk lit up on Joe Rogan’s radio show. While it was probably a mistake for him to go on Joe Rogan in the first place, the pot made it worse. Shares dropped 6.3% that day. The interview lasted two and a half hours, and it was funny in an unintentional way.

For example, Musk talked about wanting to make a flame thrower that “wasn’t really a flame thrower.” He also expounded on his favorite theory of humanity being one big simulation. Rogan, for his part, listened quietly as the monologue continued. Investors were unimpressed. This drop in shares was a low point for Tesla, which had already had a rough few months.

Safety Probe Into SpaceX

SPACEX
SPACEX

After Elon Musk smoked a joint with Joe Rogan online, NASA became concerned about the safety of SpaceX. They instigated a probe into the “safety” of SpaceX. The probe is expected to last months and focus on the “culture” of SpaceX and another company related to SpaceX.

The general idea behind the probe is that potheads usually don’t take things that seriously. And, if someone’s going to be shooting a rocket full of human beings into space, that person should probably have a no-nonsense approach. The culture investigation is more than just HR slapping someone on the wrist. Stocks dropped a little at news of NASA’s concern with SpaceX.

Azealia Banks Weekend at Elon’s

AZEALIA BANKS
AZEALIA BANKS

Last but not least, in other weird, Musk-related news, rapper Azealia Banks spent the weekend at the billionaire’s mansion. Azealia was there to work with Musk’s new girlfriend, the musician Grimes. Azealia tweeted her observations of the weekend, alleging drug use, hairplugs, phone tapping, and more.

Azealia herself is known for lying, so the veracity of these accusations has yet to be established. But, the one that seemed the most believable was that he was tripping on acid when he sent the aforementioned privatization tweet. While drugs would explain why he would do something that bizarre, it certainly did not reassure investors of his stability. His stability has been and continues to be a major issue.

Weekend Read: Elon Musk’s 8 Biggest Mistakes And Blunders
 

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Weekend Read: Elon Musk’s 8 Biggest Mistakes And Blunders

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