3. Musk's Macho Mess
Hey David Brooks, maybe next time Elon Musk should try keeping some of his "grand verbiage" to himself. Don't you think?
The outspoken Tesla (TSLA) CEO, who was glowingly profiled by Brooks in an op-ed for The New York Times last week disappointed Wall Street Tuesday by slashing 2012 sales guidance for the electric car company because of lower-than-expected deliveries of its new Model S sedan. Tesla said it now expects its 2012 revenue to total between $400 million and $440 million, down from its previous forecast of $560 million to $600 million.
Shares of the company sank over 8% to $28 on Tuesday's news. The stock had run up beyond $30 in the prior weeks as a result of all the fawning media coverage about Musk and his "grandiose" (Thanks again Brooksy) space exploration plans.A sales misfire wasn't the only thing slamming the stock though. Tesla also announced a secondary offering of 4.3 million shares of its common stock on Tuesday. And just in case the company hadn't flooded the market with enough stock, Tesla granted the offering's underwriter, Goldman Sachs (GS) a 30-day option to buy an additional 651,740 shares. That's okay though. If there is one thing the market is clamoring for, it's more shares of Tesla to sell short. You thought we were going to say profits right? Wrong! Nobody expects those to hit until next year, if then. No, it's the shares themselves that traders want. More than half of Tesla's shares are currently held in short accounts, so borrowing the stock to bet against Musk has become not only one of the most popular, but one of the most expensive wagers on Wall Street. Not to forget one of the most personal, especially after Musk challenged his doubters in an Fox interview earlier this month. "I think it is very unwise to be shorting Tesla, it's very unwise," Musk told Fox. "There is a tsunami of hurt coming for the shorts." Sorry Elon, but judging from this week's action, it was less a tsunami for the shorts then a lot of babbling by Brooks.
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