Are You All Caught Up On Tesla? There’s Always More

(Bloomberg Opinion) -- Fun fact: Tesla Inc.’s third quarter ends in 12 days. As quarters go, this one has lasted about five years. A lot has happened:

  • Elon Musk, the CEO, accused a British spelunker of being a pedophile amid an argument over (stay with me) the utility of a metal tube (or “mini-submarine” depending on your perspective) in rescuing some stranded children in a cave in Thailand;
  • Elon Musk, the CEO, apologized for that, then doubled down on the accusation in an exchange with BuzzFeed and went on to speculate that it was “strange” that the spelunker hadn’t sued him — a few weeks before the spelunker then sued him;
  • Elon Musk, the CEO, gave an interview to the New York Times in which he talked of his exhaustion and at one point was “seemingly overcome by emotion,” and then later appeared on a podcast during which he took a drag on a spliff;
  • Elon Musk, the CEO, touched off a spike in Tesla’s stock with tweets saying he might take the company private at $420 a share, having secured funding and investor support;
  • Elon Musk, the CEO, then indicated that funding wasn’t that secured and investors weren’t wholly on board, before ditching the plan in a late-Friday news dump 17 days later;
  • Elon Musk, the CEO, by sending out those tweets, exposed Tesla to a class-action lawsuit, SEC scrutiny and, it emerged Tuesday, an inquiry from the Department of Justice;
  • Elon Musk, the CEO, said goodbye to his latest chief accounting officer after just 29 days on the job, as well as his HR chief and VP for worldwide finance and operations;
  • and Tesla made and sold some cars and things.

News of the DOJ inquiry, broken by my colleagues at Bloomberg News, sent Tesla’s shares into a skid. By mid-afternoon, though, they had recovered somewhat and were down just 3 percent or so. Tesla’s statement emphasizing it was cooperating with a voluntary request for documents from the DOJ and hadn’t been subpoenaed appeared to calm some nerves.

But, seriously? To pay some 88 times non-GAAP earnings forecasts for 2019 after this latest news really requires one to treat every revelation as some sort of discrete event. The DOJ inquiry could lead to all sorts of speculative outcomes. What can’t be in doubt, however, is that it is rooted in a self-inflicted crisis stemming from a pattern of strange behavior by the company’s own CEO (and with little apparent effort by the board to curb it).

Less than two weeks ago, Musk was telling investors Tesla was “about to have the most amazing quarter” in its history. Within another two weeks or so, we should get our first glimpse of what that really means when the company releases sales figures. As it stands, though, the numbers are merely one strand in a drama where, if this were televised, the “previously on Tesla” section would occupy half the running time at this point just so people could keep up. 

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.

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