Tesla Inc (NASDAQ:TSLA) Stock Falls as Musk Stirs Up Controversy

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Tesla Inc (NASDAQ:TSLA) stock fell a little over 3% Monday after Elon Musk found himself under fire for a number of controversies. Stirring up trouble on Twitter (NYSE:TWTR) and firing back at his critics is nothing new for the outspoken Musk, but this time it appears he may have gone a bit too far and investors are fleeing.

The first, and perhaps more minor of Musk's controversies (scandals?) was the revelation that the green energy CEO was reportedly a major donor to Republican super PACS. The Tesla Inc (NASDAQ:TSLA) founder quickly took to Twitter (NYSE:TWTR) to deny any political affiliation and the charge that he was a top donor to the Republican party.

Records reveal that Musk did indeed donate $38,900 USD to "Protect the House", an organization dedicated to keeping a Republican majority in the U.S. House of Representatives. Musk downplayed but never denied making the donations and went on to tout his efforts in protecting the environment. It has been noted that Musk has donated to both political parties though it isn't enough to quell the suspicions of critics and consumers who believe musk may not be as forward-thinking as they thought. The defensiveness Musk displayed on Twitter (NYSE:TWTR) only added fuel to the fire.


PR Points

Now we get to the big one. More than likely you have heard about the recent, and now famous, Thai Cave rescue. The international effort between cave divers who rescued a Thai youth futbol team from a cave that flooded during a rainstorm leaving them trapped. The 12 boys and their coach were all successfully rescued, but tragically one diver lost his life. During the rescue effort Tesla Inc (NASDAQ:TSLA), and more specifically Elon Musk, offered help in the form of a tiny 3-foot long submarine. This was the second plan of what many likened to harebrained schemes and Musk seizing upon a tragedy for PR points. 

Vern Unsworth, a British cave explorer and one of the rescuers was interviewed later called the miniature sub a "PR stunt". The Tesla Inc (NASDAQ:TSLA) CEO apparently didn't like that very much, launching intoTwitter (NYSE:TWTR) tirade which culminated with the now infamous line: "Sorry pedo guy, you really did ask for it." Needless to say, no one was very happy to see Musk insult a literal hero. During the rant Musk even attempted to cast doubt that Unsworth was even present. Since the accusations have no evidence to back them up Musk has set himself up for a defamation lawsuit which Unsworth is reportedly considering.

So there you have it. The Elon Musk induced woes that are dragging Tesla Inc (NASDAQ: TSLA) stock prices down. You may be thinking this will blow over and Teslan Inc (NASDAQ: TSLA) stock will rally back. Unfortunately, these aren't the only problems plaguing the company and may only be scratching the surface. Twitter (NYSE: TWTR) is a major source of pain for Musk, resulting in some stockholders calling him out on the service, and the United Auto Workers pushing for a Federal Labor Board investigation after a tweet they interpreted as a threat to workers who decide to unionize.

MeanwhileTesla Inc (NASDAQ: TSLA) struggles to boost production on its model 3 car, Musk himself described the process as "hellish". Attempting to meet their 5000 unit a week production number is a key to the company who has stated that they won't turn a profit until that mark is met. The key number was supposed to be met by the end of last year but has since been delayed missing another deadline recently at the start of July.

While all of this happens the company hemorrhages money, reportedly burning through $6,500 USD a minute, and hasn't posted a profit since it's initial public offering in 2010. Musk tries to assuage investors and states that the company will soon start making much more than it spends but analysts point out if something doesn't change drastically, and soon, Tesla Inc (NASDAQ: TSLA) may run out of capital by the end of the year. It's becoming clear that Tesla Inc (NASDAQ: TSLA) investors are getting a bit tired of watching Musk's antics and being strung along on broken promises.  

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Comments (8)

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Submarines, flame throwers, rockets and name calling in the end are distractions

   0   Reply (1)   Follow(437)  

    image

    true, all of it is very engaging and entertaining but when the curtain is pulled back and you look at the books things don't look so fun.

       0  

      image

      Will Elon Musk be listed on Tesla\'s next 10K as \"Known Risks\"?

         0   Reply (0)   Follow(437)  

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        • Scott
        • ,  Contributor
        • 18 July 2018, 10:07 am

        At $325 a share, I am thrilled with Tesla\\\'s results!

           0   Reply (0)   Follow(437)  

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          • Jesse
          • ,  Contributor
          • 18 July 2018, 10:07 am

          Do people actually still believe that Tesla has 450,000 reservations?

             0   Reply (0)   Follow(437)  

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            • DoubleD
            • ,  Contributor
            • 18 July 2018, 10:07 am

            It would be beneficial to tesla if Musk closed his twitter account.

               0   Reply (1)   Follow(437)  

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              that truly seems to be the biggest problem for shareholders haha

                 0  

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                • DoubleD
                • ,  Contributor
                • 18 July 2018, 10:07 am

                Tesla seems to have a cult following

                   0   Reply (0)   Follow(437)  

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