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By Alec Hogg
I’m thoroughly enjoying Ashlee Vance’s inspiring biography of Elon Musk. And am in awe of his drive, ambition and vision. It was also great listening to his distinctly South African accent on the quarterly investor conference call.
Yesterday’s global business news channels were full of how the share price of Musk’s electric car company Tesla dropped 10% after those results – taking $3bn off its market value. Reason the company dropped its production target for the year from 55 000 to “between 50 000 and 55 000.”
In his letter to shareholders accompanying the second quarter results, Musk put the reduction down to checking that suppliers could meet quality standards and explained that every week this takes, reduces production by 800 cars.
Musk knew the adjustment wouldn’t be welcomed by Wall Street analysts, but didn’t leave them wondering: “Simply put, in a choice between a great product or hitting quarterly numbers, we will take the former.”
Traders didn’t like it. Long term investors, on the other hand, will surely see the price slide as an opportunity. After all, what other company do you know that’s already sold out all it can produce until the end of 2016?
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