A year for Elon Musk! In one year, the world’s richest man lost this status and saw his wealth melt from 270 billion to 140 billion dollars. The main reason? Electric car maker Tesla, in which he is the main shareholder with 13% of the capital in addition to being the leader, has seen its share price fall by more than 69% throughout the year.
But if Elon Musk deserves the title of personality of the year 2022, it is for his acquisition of Twitter for 44 billion dollars, which was filed in April. Unexpectedly, the acquisition turned into a soap opera with many twists and turns, the businessman tried to withdraw from signing the contract and to overcome the management of Twitter to the point of bringing the case to justice, before finally taking control of the social network to impose a brutal direction on it. More talkative than his billionaire counterparts, Elon Musk has increased his public statements to promote his conservative political ideas, sometimes at the expense of his portfolio of companies (Tesla, SpaceX, Neuralink and The Boring Company).
The image of the genius was scratched from the acquisition of Twitter
Elon Musk began the year boasting of the resounding success of his two main businesses, electric car maker Tesla and space company Space X, to the point of comparing himself to Tony Stark, the billionaire superhero and brilliant inventor behind the armor of Iron Man. So when he made his bid to become the sole shareholder of Twitter at a price of $54.20 per share, well above the market price, experts looked for a logical explanation. Why would a brilliant entrepreneur buy a company that has struggled for more than a decade to find its economic model? The billionaire remained very vague in the game, and barely sketched a project – nicknamed X – which consists of transforming the social network into a super-app, where payments will be forwarded, like WeChat in China.
But as soon as the billionaire came to the helm of Twitter and he began to describe it as a liquidity hole, in such a difficult financial situation that he risked filing for bankruptcy – although the company regularly managed to break even before the redemption. With this justification, Elon Musk has repeatedly cut the group’s workforce to the point of eliminating more than 60%, closed foreign offices and renewed almost all management staff. All this, commented on each decision with several tweets. As for the ambitious super-app project, it’s faltering. The company immediately deployed the redesign of Twitter Blue (an 8 euro subscription that should serve as the foundation of the payment system) but had to withdraw it several times due to glitches, before it was finally implemented. put in a month and a half later.
Musk has been building an image of a hard worker for many years, which he hopes to demand an intense rhythm of work from his employees. Musk sleeps on the floor of Tesla’s factories, gets involved in engineering and serves as the chief lobbyist for his companies. His extreme method, instinctively, seems to be working: SpaceX’s reusable shuttles carry astronauts to the international space station, while Tesla has given a new dimension to the electric car market. But in the case of Twitter, Musk only gives the impression of browsing by sight, taking user submissions unrelated to the company, which he calls ” interesting “.
Worse, the brilliant Elon Musk revealed his flaws. His speeches at Twitter’s public audio conferences – the Twitter Space – suggested a leader unable to respond to criticism, preferring to leave the discussion or dismiss his interlocutor. The image of the billionaire hit, and the latter himself drove the nail in the coffin: in December, he asked through a poll on Twitter – which moreover does not respect any of the protections necessary to have strict result- if he has to leave his position as head of the social network. 58% of the 17 million voting accounts (about 12% of his number of subscribers) expressed their desire for him to leave. Elon Musk said that he will start looking for someone for the job, but he will continue to take care of the software and the servers, that is, the main value of the social network.
Tesla, neglected and in bad shape
Since the billionaire took control of Twitter at the end of October, Tesla stock has fallen 47%, and has fallen below $200 for the first time since November 2020. Over the course of the year, this fall has increased to 69.5%. In question: the new leader seems to have been absorbed by political issues, and has been accused of abandoning the management of the car manufacturer. As he qualifies himself ” neither left nor right “, the powerful billionaire called to vote for the Republican camp during the American elections of midterms, and he spends his days commenting on and sending publications from the conservative camp. To support his ideological fight, he opened the internal files of Twitter to a small number of journalists. anti mainstream ”, with the aim that they expose the inconsistencies and contradictions of the previous direction of the social network. Playing with the limits of conspiracy, the series of articles called Twitter Files looked at the eviction of figures from the American far right such as Donald Trump or the censorship of disinformation on Covid-19.
This promise was frowned upon by some of Tesla’s shareholders, as the company was already going through turmoil and didn’t need more controversy. For starters, its production has slipped in China, largely due to the government’s harsh anti-Covid policies that have disrupted the operation of its Shanghai gigafactory. After a brief return to normal, production slowed again in January, against a backdrop of a dramatic resurgence of the epidemic in the country. Then, his projects, like the Cybertruck and the Roadster, which have been announced for years, still don’t have a production date. Only the semi-trailer, announced three years ago, entered production. As for the range of Tesla cars, it receives updates but there is no new flagship to highlight, while the historical manufacturers (Mercedes-Benz, Volkswagen, Hyundai, Kia…) focus on the market segment of this, that the Chinese market is starting to invest local manufacturers, and its direct competitors (Rivian, Lucid, etc.) are aging.
Tesla is still the broad leader in its market (65% share, 14 points lower than in 2020), but needs to prove in 2023 that it has the tools to stay that way. And to achieve this, shareholders demand a 100% committed Musk. The latter denied the spread, but his many messages on Twitter indicate the opposite. It’s not too late for Tesla to turn around: the company made $3.3 billion in third-quarter revenue, and while it might miss its incredible 50% annual growth target, it won’t. however remains on a positive trajectory.
Neuralink and The Boring Company, two balls in the making?
But Elon Musk isn’t Tesla’s only situation to manage. As the gem loses its luster, its less successful investments become more visible. Starting with Neuralink, a company created in 2016 that aims to develop brain implants for neurological purposes, for example to combat paralysis. early December, Elon Musk finally presented the next step for his ambitious project: the launch of human trials in the second quarter of 2023, although the company is still waiting for the necessary permissions for this moment. But days after the presentation conference, Reuters announced that the company was under federal investigation, prompted by reports of animal abuse. In particular, Neuralink has been accused of rushing its tests, thereby causing avoidable suffering and death to its test subjects. According to the news agency, at least 1,500 animals have died as a result of the tests since 2018, including 280 sheep, pigs and monkeys. If this number does not constitute proof of abuse on its own, it is supported by internal testimonies that make a link between failed experiments and the pressure on product development. Elon Musk is said to have repeatedly hinted to employees that Neuralink may shut down if progress is not sufficient. The company has already missed several deadlines, and is slow to deliver.
While Neuralink’s situation doesn’t look good, it’s still better than The Boring Company. Also Founded by Elon Musk in 2016, this company builds tunnels, with the promise of running autonomous high-speed shuttles through them, to avoid surface traffic jams. Problem: the first project, a 2.7-kilometer-long tunnel inside the Las Vegas Convention Center, completed in 2020, turned out to be a fiasco. To begin with, it will only be accessible for a limited number of days, and only by conference participants. Then, the shuttles that circle there are not fast (50 km/h, far from the promised 240 km/h) and also not autonomous, because they are just Tesla Model 3 driven by drivers. Worse, tunnel jams form during peak hours, meaning the project is not fulfilling its original promise. But only at the end of November wall street journal exposed the extent of the disaster.
American cities that signed contracts with The Boring Company, as Los Angeles, Baltimore and Chicago had to abandon the construction of their tunnels. In Chicago’s case, Musk’s company asked for a budget extension of $455 million when the city was originally supposed to pay only $45 million. Other cities were simply ignored by society, despite their warnings. In other words, The Boring Company grossly underestimated the cost of its projects in addition to overestimating its production capacity, which resulted in the cancellation of nearly all of its sites. Moreover, it no longer promises that its shuttles will be autonomous.
Fortunately, with the collapse of Elon Musk’s company, one company remains untouched: SpaceX. In 2022, the company accelerated the deployment of its constellation of Starlink satellites, the largest of its kind, intended to provide Internet to disconnected territories. The company announced that it will pass the one million subscriber mark for its service in December 2022. Not yet enough to cover its investment costs – estimated in 2018 at more than ten billion dollars – but enough to show interest in offer But at the same time, the Crew Dragon shuttles continue to ensure the rotation of the crew of the international station: SpaceX has established itself as a necessity in the sector. And at this moment, Elon Musk’s setbacks do not affect him.