In the eyes of Tesla shareholders, Elon Musk needed little other distractions. Openai can turn out to be expensive.
EV Maker’s multitasking chief executive leads a consortium bidding for $97.4 billion on nonprofits that manage Openai businesses. The bid is supported by Musk’s own artificial intelligence company called Xai and includes backers around Venture Capital World, the Wall Street Journal reported late Monday.
Openai is more than twice what Musk paid on Twitter in 2022. It’s a long shot at best, especially given the personal friction between Musk and Openai CEO Sam Altman. Altman responded to Musk’s offer on Monday, offering to buy Twitter for $9.7 billion. This implies a decline in market value sc fever that a social media platform currently known as X is experiencing under Musk’s ownership.
Tesla stock fell 6.3% on Tuesday. According to FactSet data, EV makers have just closed a difficult year. And that’s particularly different from 2022, when the company’s sales are still growing at double-digit high rates. In a report Tuesday, Oppenheimer’s Colin Rush called the Open Moment “a distraction from the Tesla challenge.”
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Distractions have proven to be previously costly for Tesla shareholders. The company’s market capitalization fell more than two-thirds in 2022 after Musk first revealed its Twitter ownership in early April. Investors were worried about Musk’s focus on the platform and his divisive presence on it.
Tesla’s shares didn’t even fully recover these losses until after the US election three months ago. However, stocks have also been significantly cooled, falling nearly 18% between the inauguration ceremony and the end of Monday. Musk is closely involved in some of the administration’s more controversial moves, such as the efficiency of the newly created government, or the operation of Doge.
The CEO has been dazzling with politics for a long time. However, few people have public profiles as big as Musk, and few public companies are more closely linked to their image of chief than Tesla. In a report last week, Stifel analysts said Tesla’s four-week net favoritism rating is “closing a record low,” according to the survey. Data from the Stifel think tank group could potentially be heading towards sales,” the report read. Oppenheimer’s Rush calls Musk’s political activity a “potential overhang” about Tesla’s sales in his report.
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Even with recent weaknesses in stocks, Tesla’s market capitalization is still above the market capitalization of the world’s next 20 largest automakers, according to data from S&P Global Market Intelligence. And it cannot be said that shareholders have not been warned. “Mr. Musk has spent quite a bit of time with Tesla and is very active in our management team, but he doesn’t pay full time and attention to Tesla,” said Tesla’s annual event. 10-K filing has been warning since it was released in 2010.
However, these boilerplate passages usually refer only to the leadership of the mask SpaceX. In its latest annual submission last month, Tesla added X, Xai, Neuralink, boring companies and Doge institutions as competing requests for boss time. And he’s unlikely to end up in canned food due to excessive moonlight. “We rely heavily on the services of Tesla and CEO Technicars, Elon Musk,” Filing reads. This year’s forecast revenues have increased over 114 times, and Tesla stocks have yet to grow too much, a big bet even the King can’t get.
Write to Dan Gallagher at dan.gallagher@wsj.com
