Munster To Musk: Apologize, Ignore The Shorts And Maybe Take A Break From Tweeting

Elon Musk isn’t winning any friends with his recent, aggressive outbursts. He’s not winning Tesla Inc TSLA capital either.

What To Know

“Over the last 6 months, there have been too many examples of concerning behavior that is shaking investor confidence,” Gene Munster, managing partner at Loup Ventures and Tesla permabull, said Tuesday afternoon in an open letter to Musk. “In our view, your outburst at analysts on the March 2018 earnings call, your ongoing frustration with short sellers and the media, your June email exchange with the saboteur, and your confrontation on Twitter with cave diver Vern Unsworth each raised flags with investors.”

Musk apologized for his actions in an early morning tweet:

Nonetheless, his actions against me do not justify my actions against him, and for that I apologize to Mr. Unsworth and to the companies I represent as leader. The fault is mine and mine alone.

— Elon Musk (@elonmusk) July 18, 2018

Why It's Important

The ultimate fear is that the CEO’s behavior detracts from Musk’s credentials, jeopardizes Street confidence and, subsequently, compromises capital for the cash-strapped Tesla.

“Your behavior is fueling an unhelpful perception of your leadership – thin-skinned and short-tempered,” Munster wrote.

With praise for Musk’s visionary leadership and reiterated support for Musk’s mission of sustainable energy, Munster urged Musk to apologize for flippantly accusing Unsworth of pedophilia, to refocus his message on product progress, and to a break from Twitter Inc TWTR — Musk’s standard vehicle of destruction.

The last step is seen to protect Tesla’s immediate investor base and its prospective consumer base.

“His role is particularly important because Tesla, to date, doesn’t do advertising, so the potential consumer’s opinion of the company is being formulated by how he engages with Twitter, which is not healthy at this point,” Munster said in a Bloomberg TV interview.

What's Next

The Loup founder also advised ignoring short-sellers and the swarm of Tesla skeptics.

“During my time as an analyst I have observed that when companies aggressively engage with short sellers, they lose,” Munster wrote, adding on Bloomberg that such engagement is “always a red flag.”

Tesla shares had fallen 3.6 percent on the tweet about Unsworth but have since fully recovered. At time of publication, shares traded at a rate of $324.17.

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Image credit: Heisenberg Media, Flickr