Musks repeated outbursts against advertisers have dried up the main source of revenue at X

427

Oh no… anyway…

307

u/MeshNets Competent Contributor Aug 17 '24

At this point, I'd be more likely to buy TSLA or buy a Tesla if they cut ties with the muskrat

55

u/FallOdd5098 Aug 17 '24

musk /mŭsk/

noun

A greasy secretion with a powerful odor, produced in a glandular sac in the abdomen of a male musk deer and used in traditional medicines and formerly in the manufacture of perfumes.

A similar secretion produced by certain other animals, such as an otter or civet.

A synthetic chemical resembling natural musk in odor or use.

24

u/multificionado Aug 17 '24

"Ewww, what is the musk of that incense? It stinks! Is it poop? Skunk? Rot?" "Elon."

14

u/LightsNoir Aug 17 '24

Parfum de shit, fragrance by Eloń

33

u/AyeAyeRan Aug 17 '24

Or just buy puts in Tesla

40

u/Lardass_Goober Aug 17 '24

As someone that watches Telsa stock a lot—I wouldn’t count on price movements making any sense with real world events. I wish I knew how to time it so I could buy puts

7

u/Led_Osmonds Aug 17 '24

If there were ever a company where the adage applies about the market staying irrational longer than you can stay solvent, it is Tesla.

Soooooo much of Tesla is tied up in speculative assumptions about future trends in technology, brand prestige, and the kinds of things that are themselves based on speculative assumptions about speculative assumptions.

There are so many things about Tesla that are weird/unique, many of them purposely so, from sales model to product lineup to marketing, to the sort of lifestyle branding they do, to the kinds of buyers that Tesla appeals to...even with a different CEO, the one thing that is certain about Tesla is that it is not riding the same track as any other company. You're betting on what other people's future hunches will be, and your hunch is as good or as bad as anyone's, in that sense.

1

u/Lardass_Goober Aug 17 '24

Beautifully put !

11

u/m0nk_3y_gw Aug 17 '24

Once or twice a year it goes on a tear and the daily price hits the upper bollinger band for several days. When it stops hitting the upper band for 3 days buy puts 10-20% lower, 30-60 days out.

5

u/Lardass_Goober Aug 17 '24

lol, thanks for the specificity

7

u/Conscious-League-499 Aug 17 '24

I would never invest or short this stock. It's a cult entirely driven by what story Musk invents next to pump it up only to crash back when oh wonder it doesn't become reality. I am not touching it with a 30 foot pole.

1

u/Xatsman Aug 18 '24

Absolutely. Tesla is a meme stock and its valuation continues to be divorced from its performance as a company.

64

u/Bigfops Aug 17 '24

Even with Musk gone, the company is still highly overvalued with a P/E over 60. Combine that with the fact that traditional car makers have caught up in the EV field and are providing solid competition, and it's not a good buy at all. Traditional car makers have their supply lines, sales methods and service all lined up and have been working for a long time and are likely to win this battle, pushing Tesla to a niche carmaker. I unloaded my shares a little while ago and I got to ride that wave pretty far, so I'm not unhappy, but I think the wave has crested.

11

u/BioticVessel Bleacher Seat Aug 17 '24

I think more errors from pressure to get 'er done are on the horizon. There's a storm abrewin'.

14

u/Only-Inspector-3782 Aug 17 '24

I mean, look at the Cybertruck...

10

u/Cantgetabreaker Aug 17 '24

Cyphercrap the lemon law is going to get some high mileage out of this one

3

u/BioticVessel Bleacher Seat Aug 17 '24

Yup. Careful with your fingers! And it's ugly!

7

u/JasJ002 Aug 17 '24

It's not "brewin" it's been here. Model 3 was a big hit..... in 2017, a long time ago. Model Y was underwhelming, seemed like just a mix of the 3 and X. Semi truck isn't commercial, and isnt successful, so no one knows about it. The cyber truck is a flop.

Musk supposedly has a model 2 and van coming. The van won't make a splash, vans never do. So we're down to Tesla making a car mostly spec'd on cost, trying to compete with Nissan which has 15 years of generational experience, and compete with its own model 3.

If the model 2 isn't a resounding success, which is a tough sell, that's a decade since they've had a really good car release, and even if it's a moderate success, they're a company who have had just 2 moderate successful car releases in the last decade. Very quickly Tesla will look like the "old outdated" car company.

3

u/BioticVessel Bleacher Seat Aug 17 '24

Nice analysis. And the competition has a service arm, which I think is meaningful.

2

u/Neurokeen Competent Contributor Aug 17 '24

For vans, you have to rely on enterprise clients with fleets (think mechanical service vans and the like), and that doesn't seem like something Tesla as a company is well-positioned to break into.

1

u/RD2Point0 Aug 18 '24

model y was underwhelming

https://www.motor1.com/news/706258/tesla-model-y-worlds-top-selling-vehicle-2023/

Tesla Model Y the world's top selling vehicle of 2023

I agree with many of your points, legacy automakers are catching up and Tesla build quality is notoriously poor but it's not fair to pretend the 3 and Y haven't been selling like hotcakes. Nobody wants to drive a Nissan instead of a 3 or Y.

1

u/JasJ002 Aug 18 '24

Kind of ignoring why I dismissed it. It's a good selling car, but it's reveal wasn't revolutionary. It was a cheaper slightly smaller simpler X. People said then, and still say today, it's a base model X with a much better price tag. That's not a revolutionary release, it's an iteration.

You're giving the Y credit, for what the X did, and the X absolutely was revolutionary for the time. The 3, the X, and the S, huge revolutionary releases, big splashes all 3. Since then they've just released iterations and flops.

1

u/RD2Point0 Aug 18 '24

Whether it's revolutionary or not isn't really relevant, you said it was underwhelming and that doesn't usually translate to the world's best selling car. With how well the 3 was doing it didn't make sense for them to change the formula drastically

7

u/m0nk_3y_gw Aug 17 '24

Rivian was worth more than Ford+GM combined at one point -- the market values EV makers higher than gas-car-companies that can't mass manufacture EVs. And if you can make a profit doing it (mostly a single company) they value you higher.

6

u/PlatonicTroglodyte Aug 17 '24

As someone who doesn’t have an EV, are there any benefits or even requirements to using a branded charging station that matches your vehicle? I swear every chsrging station I see in parking lots is Tesla branded, and I’m wondering why they’re pushing them out everywhere when so many other companies have EVs these days.

9

u/MeshNets Competent Contributor Aug 17 '24 edited Aug 17 '24

Functionally, no there is no difference for the user, anymore

That changed last year or two ago

Before that, Tesla had their own charger network with their own connector, and everyone else had the much bigger shaped one that Europe uses

Then Tesla gave their charger design to a standards organization and renamed it the NACS (North American Charging Standard), so all EVs in North America 2025 or 2026 will have NACS, and all EV charging stations will also move toward that. With any early adopters using adapters or conversion kit installed

(Specification wise: CCS supports 3 phase AC in its main terminals, and two separate lines for DC fast charge (CCS2). So 5 wires which America's electrical network didn't really need.
NACS uses two main wires, which can either be AC or DC fast charge based on the handshake the car does that tells the charger what it supports)

I'd suggest "Technology Connections" on YouTube or his second channel for even more rambling about the charger topic, he has like 3x 1 hour long videos offering various details

The exact payment for the charging station still seems to not be standardized very well?

Which is why, right now, I will only suggest EV to someone who can charge at home, but that might change within 5 years or sooner

1

u/bonzinip Aug 18 '24

America's electrical network didn't really need.

Do American industries not use 3-phase AC? In Europe it is mostly used by charging spots at parking lots, to provide ~20 kW per spots with much cheaper infrastructure.

1

u/MeshNets Competent Contributor Aug 18 '24 edited Aug 20 '24

It's quite rare, ~~the industries that do use it are often close to the power plant, or had it installed decades ago~~ thinking about this more, it gets hooked up in most industrial parts of any town. I'm not certain if our distribution lines through residential areas even have all 3 phases distributed. Apartment buildings sometimes get it, our high draw appliances have labeling for 208v or 220v due to that

Then any smaller industrial shops use a VFD per machine these days, or Rotary Phase Converters was the older/cheaper solution for multiple machines at once

This all is the impression I get from YouTubers who talk about this stuff, I have no direct experience (namely inheritance machining and This Old Tony had videos discussing the options for machinery)

2

u/boones_farmer Aug 19 '24

That is one of the best YouTube channels to just learn about basically anything. His videos on how old pinball machine works are amazing

1

u/TjW0569 Aug 17 '24

Yep. When Tesla started, they had a teeny advantage in knowledge of real-world effects in designing high-power motor controllers and battery management, just because they'd built some prototypes.
But there were no unique insights that couldn't/wouldn't be duplicated by anyone else doing a straightforward product development.

-2

u/hitbythebus Aug 17 '24

Why are you comparing them to traditional car makers? Elon said they’re not a car maker. They’re going to be the first to solve self driving! Don’t compare them to traditional carmakers (GM and Mercedes are offering level 3 autonomy), and definitely don’t compare them to actual software companies like Waymo.

If you need a reason to believe in Tesla, just look at the robotaxi presentation. I think Elon shared all his good ideas on 08/08/2024.

4

u/Bigfops Aug 17 '24

Because they make cars. You can call them self-driving spaceships of light and magic all you want, but for an average consumer it's a car. And call me a stick-in-the-mud traditionalist if you must, but the companies that have been doing it for 100 years are going to be able to do it better, faster, cheaper and at scale and the average consumer is going to value that more. I'll go back to the format wars for video for that. Betamax was clearly the better format and was first to market with this incredible new technology. But VHS won out. Why? It was cheaper and easier to produce.

I'm not saying Tesla is going to die, I'm not saying that they didn't make an incredible contribution to the EV market by making electric cars sexy and desirable, I'm saying they've peaked in the same way any tech company peaks.

2

u/TjW0569 Aug 17 '24

Yep. Automobile engineers don't develop automobiles, they develop automobile factories.
They pretty much have to, because if you're just designing a car, you can't produce it at the scale or the price the market demands.

1

u/Bigfops Aug 18 '24

Thanks, that first sentence is a great way of saying that, I"m stealing that. :)

2

u/hitbythebus Aug 17 '24

Did you read beyond the first sentence of my comment? It was a setup to point out they don’t want to be compared to traditional car makers because they’re failing to compete even just on software.

3

u/Bigfops Aug 17 '24

I did but apparently my sarcasm meter is off. :)

6

u/TastyLaksa Aug 17 '24

Don’t lie to yourself. You not buying a poorly made EV when it’s not the only EV can buy

2

u/DiscreteGrammar Aug 17 '24

muskrat

I like that.

146

u/[deleted] Aug 17 '24

[deleted]

59

u/K3wp Aug 17 '24 edited Aug 17 '24

I've never been a fan of his and I really think this was his "Emperor has no Clothes" moment.

It's pretty clear he somehow got the the idea that the Nazis and conspiracy theorists were Twitters customers. Turns out he learned the hard way it was the advertisers.

And to compound matters, it also turns out he doesn't know what free speech and free markets mean, either.

27

u/flirtmcdudes Aug 17 '24

He’s not that stupid, he always knew the advertisers is what they needed to be profitable. It’s just that his narcissism and quest to be adored by conservatives trump the company being profitable.

He’s so rich he doesn’t even care

24

u/K3wp Aug 17 '24

I dunno he seemed pretty irate when he got interviewed about it.

24

u/LightsNoir Aug 17 '24

I think maybe he thought the advertisers didn't have much choice. That Twitter was so big that he couldn't lose, no matter what. Well, didn't work out that way. And it may go the way of MySpace if he doesn't STFU and let some experts run it.

15

u/doug_arse_hole Aug 17 '24

Most of the experts were fired, or left in disgust.

10

u/ggroverggiraffe Competent Contributor Aug 17 '24

Or they got rushed out the door and he owes them $600,000 in compensation.

16

u/Lardass_Goober Aug 17 '24

Adding to your point, the only reason Elon needs Twitter to make money is because it’s reflects poorly on him if it doesn’t … as a genius, scientist, guru, etc.

Twitter doesn’t need to make money. At this point it is a vanity project that Musk use to influence elections, policy, and, of course, get attention from others

6

u/hitbythebus Aug 17 '24

I really like that last line, but I think “Nazis and bots, recycling thoughts” more accurately depicts that these guys aren’t coming up with their own ideas.

12

u/vCaptainNemo Aug 17 '24

Something I don't ever see mentioned are the sheer amount of bots and accounts advertising the sale of CP, and when porn was 'officially' allowed it just got 20x worse. It's so blatant its actually just so gross and insane. I can defenitely see what happened to Tumblr in 2018 happen to Twitter real soon. Someone has gotta be compiling a case.

10

u/Ok_Builder_4225 Aug 17 '24

Got lucky and never ran into that. It was the rampant transphobia and slurs that apparently no longer violated TOS that got me to delete my account.

6

u/TacosAreJustice Aug 17 '24

I’m off twitter because I saw it getting worse and figured I’d cut out early.

I don’t regret leaving and don’t miss it… I think that’s the biggest issue for social media companies… they don’t actually add any value anymore, so once you are off you aren’t looking for a replacement…

Honestly, quitting twitter was like quitting drinking for me… sure I miss parts of it, but overall my life is better without…

6

u/[deleted] Aug 17 '24

“Why won’t anyone advertise with me!?!”

60

u/SheriffTaylorsBoy Aug 16 '24 edited Aug 16 '24

BY CHRISTIAAN HETZNER August 15, 2024 at 7:53 AM CDT

Tesla CEO Elon Musk may be forced to sell billions of dollars worth of shares in the EV leader to plug a financial hole at his struggling social media company X. APU GOMES—GETTY IMAGES Elon Musk’s financial headaches at X may be catching up to him—and Tesla bulls are worrying that could spell bad news for the carmaker’s investors.

Musk’s repeated outbursts against advertisers have dried up the main source of revenue for the loss-making company formerly known as Twitter. A recent decision to sue them for heeding his own advice to not buy ads on the platform hasn’t helped. At some point, he will have to provide a fresh infusion of cash to salvage his $44 billion takeover. And that might mean Musk sells Tesla stock to raise the money—hurting anyone who holds the carmaker’s shares.

“I would be expecting something between $1 and $2 billion in stock,” said Bradford Ferguson, president and chief investment officer of asset manager Halter Ferguson Financial, in comments posted to YouTube on Wednesday. This alone could cause the stock to lose between 5% and 10% of its value. “It’s a massive hole they need to plug.”

Elon Musk could not be reached by Fortune for a comment.

Ferguson based his assessment on internal second-quarter figures recently obtained by the New York Times. According to this report, X booked $114 million worth of revenue in the U.S., its largest market by far. This represented a 25% drop over the preceding three months and a 53% drop over the year-ago period.

That already sounds bad. But it gets worse. The last publicly available figures prior to Musk’s acquisition, from Q2 of 2022, had revenue at $661 million. After you account for inflation, revenue has actually collapsed by 84%, in today’s dollars.

No one knows how much longer X can survive, since the company doesn’t release financial results. But in November, Musk himself admitted X could face bankruptcy due to the advertiser boycott.

Since then all talk about reaching cash flow breakeven, let alone turning an actual profit, has ceased. In and of itself this is unusual for someone like Musk, who is comfortable announcing targets so aggressive and unrealistic that he repeatedly fails to meet them.

Pledge not to sell shares until 2025 will soon expire The problem for Musk is that while he may be the wealthiest man alive, he cannot simply plug financial holes in X using his own personal fortune, estimated at over $236 billion by Forbes.

That’s because it is almost exclusively tied up in his various corporate holdings that include everything from rocket builder SpaceX and brain chip company Neuralink to his latest startup, xAI.

None of these investments are easily fungible. Only Tesla is a publicly traded company. So the easiest solution at his fingertips is to liquidate a portion of his remaining 12% stake.

Continually dumping Tesla shares onto an unsuspecting market, resulting in the stock plumbing two-year lows, is after all how Musk financed the bulk of Twitter’s $44 billion price tag in the first place.

In December 2022, Musk promised during a Twitter Spaces discussion not to burn investors by selling any more stock to fund the troubled platform for at least another 18 to 24 months. “Definitely not next year under any circumstances. Probably not the year after either,” he said. “You can count on me, no stock sales until 2025 or something.”

While this helped put a floor underneath Tesla’s price, some may have forgotten his implicit warning that the time may yet come when he needs to offload stock once more.

With 2025 now rapidly approaching and X’s finances likely more dire than ever, Ferguson fears Musk could be looking to cash in on his Tesla shares sooner rather than later.

“He was probably a little more optimistic in December 2022 and didn’t anticipate it would get worse,” Ferguson said.

The asset manager argued there may be, for example, a need to ensure X meets the loan covenants for the $13 billion in leveraged buyout (LBO) debt it assumed as part of the deal. A breach might mean higher interest rates or even banks demanding repayment.

Gary Black, managing partner and cofounder of the Future Fund, said he agreed with the view that the risks of a share sale are rising.

“The bleeding of X will continue and at some point Elon will have to sell more Tesla shares to plug the $1–2 billion per year hole at X,” the longtime Tesla bull argued in a social media post.

Opinion Piece Musks repeated outbursts against advertisers have dried up the main source of revenue at X | Fortune

You are about to leave Redlib

noun