How much has the critical New York Times affected Tesla Motors? CEO Elon Musk claims the bad review has cost the company millions.
“It probably affected us to the tune of tens of millions, to the order of $100 million,” Musk told Bloomberg. “So it’s not trivial.”
The Times’ now infamous review by John Broder, complete with photo of a dead Tesla Model S up on a flatbed at a charging station off I-95 in Milford, Conn., outraged Musk, who called the story “fake” on Twitter. The Times’ public editor did admit in a blog on its website that the story contained flaws.
Regardless of accuracy of the story (though Tesla’s numbers from the Times’ drive point to inaccurate), the review has done major damage to Tesla Motors. As Bloomberg reports, the company is looking to increase its output for the Model S by 25 percent in 2013. The company is also scheduled to release its electric crossover Model X in 2014.
Concerning all that lost money, Musk claims it shows more in stock value than actual car orders.
“I would say that refers more to the valuation of the company. It wasn’t as though there were 1,000 cancellations just due to The New York Times article. There were probably a few hundred,” he said.
Tesla’s stock has dropped 12 percent since the day the Times published the review, Feb. 8, including a drop of 4.8 percent on Monday alone. As of Monday’s closing, Tesla Motors’ stock market value is $3.91 billion.
But as The Atlantic Wire points out, while Tesla’s stock plummeted in the days after review (dropping almost a whole dollar), it then came back slightly when Musk tweeted that the review was “fake.” It had almost returned to its pre-review high point by Feb. 19, when it took a drastic turn on Thursday, Feb. 21, dropping to $35.16 (which The Atlantic calculates to be a $469 million loss for Tesla).
What happened on Thursday? Well, on Wednesday, the company released its fourth-quarter earnings report for 2012. As The Atlantic reports, “they missed their delivery targets in Q4 and spent more on production cost than they had expected.” This happened months before the Times’ review, and points to investor fright after seeing those numbers, rather than a bad write-up, as causing the stock drop.