Elon Musk’s public persona is coming unraveled and it could have a negative effect on Tesla (NASDAQ:TSLA) as well as the press that it gets. As I have written many times before, and as many of you know already, I believe Tesla stock and Tesla as an investment is supported only by the company’s narrative and the potential for the company to have a bright future going forward under the leadership of Musk. Certainly, the company’s current valuation isn’t coming from profitability or cash flow. Thus, we are left to believe that people are simply betting on Elon.
Many of these people betting on Elon have a preconceived notion of what his ideology is and what his politics are. Many of them are going to be stunned to find out what Slate reported on Saturday – that Musk apparently is a substantial GOP donor.Slate reported on Saturday that Muisk donated over $38,000 to a political action committee that had the goal of maintaining Republican control in Congress. For many of those who are invested in the Tesla story as a political crusade, this is likely going to come as a significant surprise.
While I’m not trying to make a statement about all people who own Tesla stock or vehicles, it is likely that a large portion of their customer base and stockholders does have some overlay with those who are affiliated with left-leaning political views. After all, that is the side of the aisle that has been championing the electric vehicle push.
Slate reported on Saturday:
Now reports indicate that Musk was one of the top donors for a Republican PAC named Protect the House.
Filings show that the Tesla and SpaceX CEO donated $38,900 to the PAC, which is dedicated to keeping Republicans in control of Congress. The PAC raised over $8 million in quarter two, according to filings compiled by ProPublica.
The top donors of the PAC include Sheldon Adelson, the Vegas casino magnate, and Robert McNair, the owner of the NFL’s Houston Texans. Although Adelson and McNair’s contributions far outweighed Musk’s — Adelson and McNair each gave $371,500 respectively, while Musk gave $33,900 — Musk was one of the top 50 donors of the PAC.
In addition to this, Musk’s controversial involvement with the recent Thailand cave rescue has ended in possibly the worst way possible – literally with a rescue worker telling him during a CNN Interview to stick his proposed solution up his ass.
For those unfamiliar with the story, Musk attempted to inject himself into a worldwide story about 13 individuals trapped in a cave in Thailand.
Musk supposedly grouped together members of SpaceX to try and manufacture a way to get these people out of the cave and, despite the fact of thousands of experts were already working on the situation, hopped on a plane to Thailand with his makeshift “kid sized submarine” and made his way to the cave where he was reportedly “asked to leave very quickly”.
After the rescue was completed, rather than being happy for the people who were saved, Musk wound up having a public feud with one of the commanders that led the operation. This feud was reported on by The Guardian, who stated:
“Elon Musk has questioned the expertise of Thai rescue officials who turned down his offer of a submarine, despite their having organised the successful rescue of all 12 boys and their football coach from a flooded cave.
The entrepreneur had offered his help and posted footage of tests being carried out on the apparatus he proposed in recent days.
But while Narongsak Osatanakorn, the head of the joint command centre co-ordinating the operation, acknowledged Musk’s offer he said that the mini submarine would not have been practical for the cave rescue.”
What it Means for Investors
Elon Musk’s public persona and his perception by many people who buy his products and invest in his company is extremely important. I’ve argued before and will likely argue again in the future that Elon Musk is really the only thing keeping Tesla with its extremely optimistic $55B valuation right now. With Musk’s persona out of the picture, I don’t think you would find an analyst on the street that would believe Tesla stock would maintain its current trajectory or valuation.
Because the Musk narrative and his public persona is so important to maintain confidence in the stock’s value, this recent report by Slate could actually wind up having a negative affect on Tesla as an investment. There isn’t much in the way of financial analysis to perform because there isn’t that much in the way of financials holding up Tesla’s stock price. Instead, this reporting may have a profoundly negative effect with many of Musk’s long-standing allies on the left and may have a overall negative affect on the company going forward.