Troubled times: Musk dives deeper into murky water with Tesla amid Twitter spats

Belligerence on social media is just one example of the increasingly erratic behaviour of electric car billionaire Elon Musk.

With concerns over his mental health mounting, the board of Tesla is said to have accelerated plans to hire a second-in-command to work alongside Elon Musk. Picture: Kiichiro Sato/AP

Elon Musk just couldn’t leave it alone. Days after his attempt to take Tesla private had ended in ignominy, the billionaire went on Twitter to renew his baffling attacks against a British diver who helped to rescue 12 children trapped in a Thai cave for more than a fortnight.

In July the tycoon had — wrongly — labelled Vernon Unsworth as a “paedo guy”.

Last week he went back on the attack. “You don’t think it’s strange he hasn’t sued me?” the Tesla founder tweeted.

After 17 days of heightened drama triggered by Mr Musk’s claim to have “funding secured” for a takeover of Tesla, shareholders had been praying that he would take a vow of silence. That always looked like a forlorn hope.

Like President Trump, Mr Musk appears to have an insatiable appetite for a Twitter fight.

His belligerence on social media is only one instance of his increasingly erratic behaviour, which is casting a dark shadow over the electric carmaker.

Mr Musk, 47, has raised billions of dollars from Wall Street investors on the back of his vision to up-end the automotive industry and save the planet, to boot.

Yet time and again he has failed to deliver on his ambitious targets for Tesla’s Model 3, a mid-range vehicle intended to bring electric driving to the masses.

The sleek plug-in car is fundamental to the future of Tesla, which was founded 15 years ago, has branched out into battery energy storage and making solar panels and is valued at $US 50 billion ($AU 69 billion).

So far the production lapses have slowed but not halted the company’s inexorable rise.

Despite the prodigious amounts of cash it has been burning up, Mr Musk has retained the confidence of both investors and creditors.

Bungled bid

Wall Street loves a winner and the South African-born entrepreneur definitely fits that mould. In the 2000s he minted his first billion after helping to found Paypal, the digital payments giant.

Yet patience is beginning to fray. The bungled bid has badly damaged Mr Musk’s credibility at a time when he needs shareholders to keep the faith.

Tesla is facing a looming cash crunch that many analysts believe will force him to tap investors for billions more. At the end of June it had dollars 2.2 billion in the bank after burning through $US 739 million in the second quarter.

Accounts payable — a gauge of how much a business owes suppliers — raced to $US3 billion ($AU4.17 billion).

You don’t think it’s strange he hasn’t sued me? He was offered free legal services. And you call yourself @yoda …

— Elon Musk (@elonmusk) August 28, 2018

Can Steve Bannon please insult me some more? Best PR I’ve had in a while.

— Elon Musk (@elonmusk) August 31, 2018

“This suggests that Tesla delayed paying its bills to improve its cash burn,” one technology analyst said. More worryingly still, the company is sitting on $US 2 billion ($AUD 2.78 billion) of debts, of which $US 1.2 billion are bonds that convert into shares in November and March.

Tesla is likely to have to repay or refinance these loans as the stock price is significantly below the level where they would convert into shares.

Tesla has a junk credit rating and would have to pay a high rate of interest if it were to tap the bond market in the autumn. Analysts said that it could pledge some of its assets as collateral against future borrowings, including the Tesla brand, which is worth an estimated $US4 billion ($AU5.57 billion).

Pawning its marque, though, might be a step too far for Mr Musk, who has insisted that the company does not need to raise any cash this year.

Indeed, he hungers for further expansion. In July he outlined plans to build a vast facility in China capable of churning out 500,000 cars a year. The new factory, which would be Tesla’s first outside the United States, would be paid for with loans from Chinese banks and “local debt”, according to Mr Musk.

Before then, he must prove that he can consistently hit the 5000-a-week production target for the Model 3 and staunch the outflows of cash.

Tesla vehicles stand outside of a Brooklyn showroom and service centre. The electric automaker saw its stock drop after Musk reversed his plans to make the Silicon Valley company private. Picture: Spencer Platt/Getty

The company’s precarious finances are the main reason that Mr Musk wanted to take Tesla private.

Having to answer to public investors placed “enormous pressure on Tesla to make decisions that may be right for a given quarter but not necessarily right for the long term”, Mr Musk wrote the day after he tweeted about his $US420-a-share ($AU584) bid.

Musk sleeps in Tesla factory

He has little patience with the scrutiny that is part-and-parcel of being the chief executive of a public company. This year he lambasted one Wall Street analyst over his “boring, boneheaded questions”.

Now that he has dropped his bid, with the shares falling to just over $US300 ($AU417), he is under pressure to end the production “hell” at Tesla’s Fremont facility in the tech-heavy San Francisco Bay area of California. Mr Musk has taken to sleeping at the factory, where he is to be seen fixing robots and helping out on the production line.

In an emotional interview with The New York Times, he said that he was worn out physically and mentally after putting in 120-hour weeks and occasionally had to take pills to sleep.

In talking to our public investors, most were supportive of optimizing for long-term value creation over quarterly earnings. This was also a factor in remaining public.

— Elon Musk (@elonmusk) August 25, 2018

With concerns over his mental health mounting, the board of Tesla is said to have accelerated plans to hire a second-in-command to work alongside him.

Some investors believe that he should take a sabbatical. Mr Musk claims not to have had a full week off since 2001.

He could be facing the prospect of a more prolonged, enforced absence.

America’s financial regulator is said to be preparing to investigate his assertion that he had “funding secured” to take Tesla off the market. The declaration, which sent shares in Tesla sharply higher, looked uncertain, at best, in light of his about-turn less than three weeks later. Lawyers said that the US Securities and Futures Commission could bar Mr Musk from serving as a director of a company if he was found to have misled investors.

He also will have to fight an investor lawsuit. Even Mr Unsworth, the British diver, is said to be preparing a defamation action.

For the quixotic Mr Musk, it never rains but it pours.

— The Times