"Does anyone seriously think that the Musk of today is the right CEO to manage the Tesla we need?"

Casino Royale

Despite posting disastrous quarterly earnings, Tesla is still worth more than Toyota, Porsche, Mercedes, and Hyundai combined.

But experts are becoming wary of the company's sky-high valuation of well over half a trillion dollars in market capitalization — long a subject of debate — especially now that sales are in freefall and Tesla's competition is flourishing.

Meanwhile, its CEO Elon Musk — who has long made a habit of over-promising — is quickly turning into a "meme-stock carnival barker," as economic historian and UC Berkeley economics professor J. Bradford DeLong argued in an excoriating new piece for Project Syndicate. In fact, Musk is currently chasing a $55 billion pay package even as he conducts mass layoffs.

"From the standpoint of its suppliers, employees, and customers, [Tesla] is a source of income and production," DeLong wrote. "And from the standpoint of Wall Street speculators, it is a bouncing ball in a roulette wheel: a tech-bubble casino play."

AI Gamble

Analysts have long suspected that Tesla's considerable valuation vastly exceeded its actual worth. And with Musk seemingly pivoting from manufacturing and EV infrastructure to AI-facilitated driver assistance technologies and self-driving "robotaxis," this schism is only bound to grow, DeLong argued.

"We should be thought of as an AI or robotics company," Musk said during Tesla's April earnings call. "The way to think of Tesla is almost entirely in terms of solving autonomy and being able to turn on that autonomy for a gigantic fleet."

That's despite "automotive revenues" accounting for the vast majority of the company's sales — not AI tech or robotics.

In other words, DeLong believes Tesla has been turned into a "meme stock" by Musk, referring to a stock that's being massively inflated by a cult-like following, especially on social media.

He's not the first to make that suggestion. Last month, investor Roger McNamee told CNBC that Tesla is a meme stock that's being traded like an "extension of Elon Musk," not "like a car company."

"For all the current Tesla shareholders planning to offload their holdings in the next couple of years, everything hinges on the company succeeding as a meme stock," DeLong wrote, "and Musk is diligently working toward that goal."

"Since there are virtually no long-term Tesla shareholders, the market does not particularly care that the company lacks a CEO who is trying to build it into an enduring profit-making organization," he added.

In short, DeLong believes that Musk has greatly undermined Tesla's mission and is throwing his weight behind the growing belief that the billionaire should be replaced.

"Does anyone seriously think that the Musk of today is the right CEO to manage the Tesla we need?" DeLong concluded. "I no longer do."

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