Monday, March 27, 2023
HomeTechnologyElon Musk’s Twitter About-Face Would Add to Hefty Tesla, SpaceX Workload

Elon Musk’s Twitter About-Face Would Add to Hefty Tesla, SpaceX Workload


Elon Musk’s

renewed interest in owning

Twitter Inc.

TWTR -1.45%

would add turning around a struggling social-media business to an already lengthy to-do list that includes colonizing Mars and building the world’s largest car company by production volume.

In an about-face, Mr. Musk this week offered to close his $44 billion deal for Twitter on the terms he originally agreed to in April. The move, which comes less than three months after he tried to abandon the deal, could avert a trial over Twitter’s ownership, set to begin in the Delaware Court of Chancery later this month.

The unexpected development signals an increased likelihood that Mr. Musk could wind up in charge of Twitter, on top of his existing chief-executive duties at electric-vehicle maker

Tesla Inc.

TSLA -3.45%

and rocket-and-satellite company SpaceX. The serial entrepreneur is also a founder of Boring Co., a tunneling enterprise, and Neuralink Corp., a neuroscience startup working on brain-implant technologies.

Mr. Musk’s pursuit of the social-media company has weighed on Tesla’s stock at times and frustrated some car-company investors who have expressed concerns that the billionaire might be stretching himself too thin.

Mr. Musk’s change of heart regarding Twitter comes as Tesla and SpaceX face myriad challenges. Tesla is racing to recover from an extended shutdown of its largest factory, in Shanghai, and bring new plants in Texas and Germany up to speed amid worsening global economic conditions. SpaceX dealt with an explosion under one of its boosters during a test this summer, and its Starlink satellite-internet unit is “still far from” generating cash, Mr. Musk said in a tweet on Tuesday.

He also has other interests and a habit of opining on issues far beyond the companies he runs. On Tuesday, Mr. Musk caused a furor when he suggested that Crimea rightfully belongs to Russia.

Neither Tesla nor SpaceX responded to requests for comment.

Mr. Musk has faced intense periods of work before, both at Tesla and SpaceX. Those episodes haven’t stopped him from turning Tesla into the world’s most valuable car company and SpaceX, formally known as Space Exploration Technologies Corp., into the world’s busiest rocket-launch operation. Those successes have helped make Mr. Musk the world’s wealthiest person.

Mr. Musk has at times complained about his workload and lamented that he doesn’t like being the boss. “It would be nice to have a bit more free time on my hands, as opposed to just working day and night from when I wake up till when I go to sleep seven days a week. It’s pretty intense,” he said during a 2021 Tesla analyst briefing.

The executive, who is on the hook for more than $33 billion in equity financing, according to a past regulatory filing, has cashed out more than $15 billion of Tesla stock since agreeing to buy Twitter. That is on top of more than $16 billion of Tesla stock sales in 2021.

Elon Musk said Tesla’s factories in Germany and Texas are losing billions of dollars as supply-chain snags and battery-cell manufacturing hurdles limit production. Output at the company’s Shanghai plant also took a hit during the city’s Covid-19 lockdown. Photo: Patrick Fallon/Reuters

Shares in Tesla retreated from their intraday high on Tuesday after it was reported that Mr. Musk had offered to close the Twitter transaction, though still closed up 2.9%.

Tesla over the weekend reported a smaller-than-expected increase in third-quarter vehicle deliveries, which the company attributed at least in part to changes to certain production and shipping habits. The company delivered nearly 344,000 vehicles in the three months ended in September, up 42% from last year’s third quarter but below Wall Street’s expectation of roughly 371,000 vehicles, according to FactSet.

Tesla has been aiming to increase deliveries by an average of 50% annually. To reach that target in 2022, the company would need to put nearly half a million vehicles in customer hands in the final three months of the year, or about 44% more cars than the record number it delivered in the third quarter.

Bernstein Research analyst

Toni Sacconaghi Jr.

expressed concerns Sunday about Tesla’s ability to reach that target amid economic uncertainty and plunging customer wait times for new vehicles.

As of September, U.S. buyers placing a new order for the standard-range version of Tesla’s Model 3 sedan, for example, could expect to wait around six weeks for their car to be delivered, down from roughly 19 weeks in July, according to Bernstein Research. Wait times for the made-in-China version of that model fell to about four weeks, from 18, in that time.

Vehicle availability is slowly improving across the U.S. auto industry as supply-chain bottlenecks ease, but remains well below historical norms. Meanwhile, rising interest rates are making it more difficult for buyers to get into new cars.

Tesla’s vehicle factory in Shanghai. Wait times for the company’s Model 3 sedan made in China have declined.


Qilai Shen/Bloomberg News

Mr. Musk in July brushed back analyst concerns about weakening demand. “This is clearly not an issue for many months for us. Our problem is overwhelmingly that of production,” he said at the time. He aims to sell 20 million Tesla vehicles annually by 2030, a feat that would make Tesla the largest car company by volume.

At SpaceX, Mr. Musk is pushing the company to step up the frequency of its launches, expand its Starlink satellite-internet business and conduct the first orbital test flight of the Starship system it has been developing for future missions, including to the moon and Mars.

Earlier this year, SpaceX completed a fundraising round that valued it at roughly $125 billion. Like other companies, SpaceX has faced inflationary pressure, and has raised prices for its Starlink business and rocket launches.

Adding to Mr. Musk’s workload is that SpaceX is launching rockets, mostly carrying Starlink satellites, at a rapid pace, outpacing competitors in terms of the number of launch operations. It had used its workhorse Falcon 9 rockets for 43 flights through Tuesday afternoon, according to data maintained by

Jonathan McDowell,

an astrophysicist at the Harvard-Smithsonian Center for Astrophysics, up from 31 for all of 2021. Mr. Musk recently said in a tweet that SpaceX is aiming for as many as 100 orbital missions next year.

Mr. Musk’s activities and public statements drew criticism from some SpaceX employees earlier this year, who said in a letter that his behavior was a source of embarrassment and alleged a gap between the company’s stated values and its current systems and culture. Some staffers who were involved in the letter were fired, with SpaceX President

Gwynne Shotwell

describing the effort as a distraction from the company’s work.

Write to Rebecca Elliott at [email protected] and Micah Maidenberg at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8


Source link


Most Popular

Recent Comments