NY Times review cost Tesla $100 million

Musk, co-founder of Tesla and PayPal, recently said that Broder’s review cost Tesla $100 million.

During his SXSW talk, Musk called Broder’s review a “low-grade ethics violation” that “was not in good faith.” He added, “I don’t have a problem with critical reviews. I have a problem with false reviews.”

That’s a lot of money.

  • Bradley Rosenfeld

    So they lost the sale of one car?

    Someone please explain to me how they “lost” a hypothetical amount of money because of bad press. Perhaps they didn’t gain as much money as they had hoped?

  • Write that off on the company’s taxes and see how far it goes.

  • Knowing what I know about the high-end car market, for him to have lost $100m in sales, it would have meant over 1000 cancellations. Even Musk doesn’t claim that: he puts the number of cancellations as “a few hundred”. But even that’s extremely unlikely: according to Wikipedia, only 2,400 Roadsters had been sold up to September last year. So even a few hundred is a massive amount of cancellations in the context of how many cars he’s likely to sell. That’s extremely unlikely.

    As for his share price: On 8th Feb (the date the review was published) it stood at $39.24. It stayed within normal trading range until 19th Feb, long after the review was published, when it dropped, hitting a low of $34.38 on 25th Feb. The fact that it dropped 11 days after the review was published suggests that the review had nothing to do with the price of the share falling, and that instead it was caused by the company’s financial results (released on 20th Feb). And it’s since recovered to a current price of $38.47.

    This is just another example of how, when you take a close look at what Musk says, it simply doesn’t match up with reality. While I admire Musk’s technical achievements, public statements like this one simply don’t add up. He really should just shut up and get on with doing what he’s good at – making a better car.

  • gravitycollapse

    Technically, this headline is misleading. Their stock dropped, causing the company’s valuation to drop by $100 million. That is not the same thing as “costing the company $100 million”, which implies they’d take a $100 million hit on their balance sheet.

    Musk’s quote: ““It probably affected us to the tune of tens of millions, to the order of $100 million, so it’s not trivial…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.”