In a rare, hour-long interview with the New York Times, in which the increasingly unstable Tesla CEO “alternated between laughter and tears”, Elon Musk provided a unique glimpse into his mind, confirming just how fragile and combustible everything inside of it is right now.
“This past year has been the most difficult and painful year of my career. It was excruciating” a tearful Musk said, apparently forgetting all those documented trips to London, Brazil, Australia, Grimes in tow, to party and blow off steam.
But while Musk may have had his share of self-created turmoil, most of it dutifully recorded on his own twitter account, it all blew up in his face when he abruptly declared on Twitter on August 7 that he had arranged to take Tesla private “funding secured.” The episode kicked off a furor in the markets and within Tesla itself, launched an SEC probe, and speaking to the NYT, Musk even acknowledged “that he was fraying.”
Case in point: at multiple points in the phone interview with The NYT, Musk “choked up, noting that he nearly missed his brother’s wedding this summer and spent his birthday holed up in Tesla’s offices as the company raced to meet elusive production targets on a crucial new model.”
Asked if the exhaustion was taking a toll on his physical health, Mr. Musk answered: “It’s not been great, actually. I’ve had friends come by who are really concerned.”
Much of the interview was a “self-pity party”, as Musk hopes to garner sympathy points from readers as well as the SEC: he said he had been working up to 120 hours a week recently — echoing the reason he cited in a recent public apology to an analyst whom he had berated. In the interview, Mr. Musk said he had not taken time off of more than a week since 2001, when he was bedridden with malaria.
“There were times when I didn’t leave the factory for three or four days — days when I didn’t go outside,” he said. “This has really come at the expense of seeing my kids. And seeing friends.”
Perhaps, but what the SEC will be mostly focused on is Musk’s admission, and latest revision to the “going private” narrative, that no one saw or reviewed his tweet about the plan to take Tesla private before he posted it.
Musk provided a “detailed timeline” of the events leading up to the Twitter postings on Aug. 7 in which he said he was considering taking the company private at $420 a share. He asserted that he had “funding secured” for such a deal, which it has since emerged was a fabrication, and potential market fraud with the sole intention of “burning shorts.”
That morning, Mr. Musk woke up at home with his girlfriend, the musician known as Grimes, and had an early workout. Then he got in a Tesla Model S and drove himself to the airport. En route, Mr. Musk typed his fateful message.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
According to the NYT, Musk reached the airport and flew on a private plane to Nevada, where he spent the day visiting a Tesla battery plant known as the Gigafactory, including time meeting with managers and working on an assembly line. That evening, he flew to the San Francisco Bay Area, where he held Tesla meetings late into the night.
Yet while Musk may have brushed it off – after all it sent TSLA stock price surging – in the past 10 days, what Musk meant by “funding secured” has become the most existential question for Tesla, and one which may determine if Musk spends time in prison. That funding, it turned out, was far from secure.
Mr. Musk has said he was referring to a potential investment by Saudi Arabia’s government investment fund. Mr. Musk had extensive talks with representatives of the $250 billion fund about possibly financing a transaction to take Tesla private — maybe even in a manner that would have resulted in the Saudis’ owning most of the company. One of those sessions took place on July 31 at the Tesla factory in the Bay Area, according to a person familiar with the meeting. But the Saudi fund had not committed to provide any cash, two people briefed on the discussions said.
The tweet is now the subject of an SEC inequiry.
So why gamble everything on just two words? Musk said he saw the tweet as an attempt at transparency, and acknowledged “that no one had seen or reviewed it before he posted it.“
Tesla’s shares soared. Investors, analysts and journalists puzzled over the tweet — published in the middle of the day’s official market trading, an unusual time to release major news — including the price Mr. Musk cited. He said in the interview that he wanted to offer a roughly 20 percent premium over where the stock had been recently trading, which would have been about $419. He decided to round up to $420 — a number that has become code for marijuana in counterculture lore.
So was he stoned? Not according to Musk: “It seemed like better karma at $420 than at $419,” he said in the interview. “But I was not on weed, to be clear. Weed is not helpful for productivity. There’s a reason for the word ‘stoned.’ You just sit there like a stone on weed.“
He might not have been stoned then, but he appears to be in a similar state much of the other time: Musk detailed his frequent use of the sleep-aid Ambien – a drug he’s discussed using before, and whose well-known side effects include sleepwalking. “It is often a choice of no sleep or Ambien,” he told the newspaper. Rather than put him to sleep, the drug has sometimes led Musk to spend his nights on Twitter, worrying some board members, the NYT said.
Musk said in the interview that board members had not complained to him about his tweet. “I don’t recall getting any communications from the board at all,” he said. “I definitely did not get calls from irate directors.”
This, too, was a lie:
shortly after the Times published its interview with Mr. Musk, he added through a Tesla spokeswoman that Antonio Gracias, Tesla’s lead independent director, had indeed contacted him to discuss the Aug. 7 Twitter post, and that he had agreed not to tweet again about the possible privatization deal unless he had discussed it with the board.
And with the story about the tweet changing on daily, if not hourly basis, now also implicating the board for potentially substantiating a misleading narrative, as regulators are out for blood, Musk added that he did not regret his Twitter post — “Why would I?” — and said he had no plans to stop using the social media platform. Some board members, however, have recently told Mr. Musk that he should lay off Twitter and focus on making cars and launching rockets, according to people familiar with the matter.
Well, there is one big reason why Musk should regret his post: this week Musk received a subpoena for more information. The consequences, if the SEC finds that Musk indeed hoped to manipulate the stock higher by posting misleading, inaccurate information, could be dire.
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At times during the interview, Musk would stop talking, “seemingly overcome by emotion” at how miserable this billiionaire’s life had become.
He turned 47 on June 28, and he said he spent the full 24 hours of his birthday at work. “All night — no friends, nothing,” he said, struggling to get the words out.
As noted above: the bulk of the self-pitying interview was an attempt at creating sympathy with the reader, or the regulators. It achieved neither.
Two days later, he was scheduled to be the best man at the wedding of his brother, Kimbal, in Catalonia. Mr. Musk said he flew directly there from the factory, arriving just two hours before the ceremony. Immediately afterward, he got back on the plane and returned straight to Tesla headquarters, where work on the mass-market Model 3 has been all consuming.
Mr. Musk paused again.
“I thought the worst of it was over — I thought it was,” he said. “The worst is over from a Tesla operational standpoint.” He continued: “But from a personal pain standpoint, the worst is yet to come.”
So besides Ambien, who is to blame for Musk’s stress? Why short sellers of course. He said he was bracing for “at least a few months of extreme torture from the short-sellers, who are desperately pushing a narrative that will possibly result in Tesla’s destruction.”
Referring to short-sellers, he added: “They’re not dumb guys, but they’re not supersmart. They’re O.K. They’re smartish.”
It’s not just short sellers that Musk thinks are “not supersmart” – he reserves that designation for virtually anyone, especially if they happen to disagree with him: in recent months, in addition to wrangling with short-sellers and sending David Einhorn “short shorts”, Musk has belittled analysts for asking “boring, bonehead” questions. And after sending a team of engineers from one of his companies to help rescue members of a stranded soccer team, he lashed out at a cave diver who was dismissive of the gesture, deriding him on Twitter as a “pedo guy,” or pedophile.
For now shares are not responding well to the interview or his effort at squeezing shorts.
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So with the board finally paying attention, is Musk’s job in jeopardy?
According to the NYT report, Tesla execs have been trying “for years to recruit a chief operating officer or other No. 2 executive to assume some of Mr. Musk’s day-to-day responsibilities, according to people familiar with the matter. A couple of years ago, Mr. Musk said, the company approached Sheryl Sandberg, who is Facebook’s second-highest executive, about the job.”
Mr. Musk said that “to the best of my knowledge,” there is “no active search right now.” But people familiar with the matter said a search is underway, and one person said it had intensified in the wake of Mr. Musk’s tweets.
The board also chimed in:
In response to questions for this article, Tesla provided a statement that it attributed to its board, excluding Elon Musk. “There have been many false and irresponsible rumors in the press about the discussions of the Tesla board,” the statement said. “We would like to make clear that Elon’s commitment and dedication to Tesla is obvious. Over the past 15 years, Elon’s leadership of the Tesla team has caused Tesla to grow from a small start-up to having hundreds of thousands of cars on the road that customers love, employing tens of thousands of people around the world, and creating significant shareholder value in the process.”
But the last word, of course, belonged to Musk, who said he has no plans to relinquish his dual roles as chairman and chief executive:
“if you have anyone who can do a better job, please let me know. They can have the job. Is there someone who can do the job better? They can have the reins right now.”
And if this interview fails to garner Musk the desired sympathy points from the US public, the regulators and the courts, once the SEC, the legal and bankruptcy process are done with Musk, he may wish he actually meant it.