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Tesla investors shrug at latest Elon Musk controversy

Stories fail to impact electric vehicle maker’s share price

Tesla shares have kept climbing despite allegations of Elon Musk's drug use. Photograph: Kirsty Wigglesworth/PA Wire

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Proinsias O'Mahony
Tue Jan 16 2024 - 05:00

Another week, another Elon Musk controversy.

The Tesla boss was in the news last week following a Wall Street Journal report on his alleged use of illegal drugs.

Such reports about Musk must be a headache for independent board members, but Tesla analysts and investors greeted the news with a shrug.

“It’s not the headlines investors want to see, but ultimately Tesla investors are immune at this point to the negative Musk headlines,” said Wedbush analyst Dan Ives.

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That was echoed by veteran technology analyst Gene Munster, who said “most investors won’t care” about the story.

The share price reaction indicated as much, with Tesla shares actually rising slightly following the story. The stock has been weak in recent weeks, and retreated in the following days, but the share price action doesn’t imply investors are overly concerned by the allegations.

As Reuters reported on Thursday, Tesla will suspend most car production at its factory near Berlin for two weeks from January 29th, due to a lack of components resulting from a shift in transport routes because of attacks on vessels in the Red Sea.

[ Is Tesla really an AI or robotics stock? ]

In 2018, Musk hit the headlines when he appeared to smoke marijuana during a lengthy interview with podcaster Joe Rogan. Tesla shares plunged after that interview, but are up some 1,200 per cent since then, despite innumerable subsequent controversies involving Musk.

[ Why does Lord of the Rings appeal to the radical right? ]

For investors, says Munster, the lesson is clear: “If you want to profit from Elon, you have to put up with his controversies.”

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