Unrest Emerges within Elon Musk's Business Realm

Elon Musk was at the center of attention yesterday as his various ventures encountered setbacks. The shares of Tesla, his electric vehicle manufacturing company, experienced a 9.75% drop on Thursday after reporting a more than 20% YoY decrease in Q1 earnings. Despite this, Musk is moving forward with plans to reduce prices to stimulate sales.

In his capacity as the CEO of Twitter, Musk made headlines as he threatened to take legal action against Microsoft for allegedly using Twitter data unlawfully to train its artificial intelligence model. This move came a day after Microsoft reportedly removed Twitter from its advertising platform.

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Furthermore, Musk's space exploration company, SpaceX, launched its Starship rocket for the first time, but unfortunately, the most potent rocket ever built exploded mid-flight. Though this sounds like a significant setback, such incidents are common during spacecraft testing.

On Thursday, all major U.S. stock indexes closed lower, and similarly, Asia-Pacific markets traded down on Friday. Japan's Nikkei 225 dropped approximately 0.4%, as the country's core inflation for March remained at 3.1%, the same as in February.

According to Zou Lan, director of the monetary policy department of the People's Bank of China, China's consumer prices will experience a U-shaped trend throughout this year. The central bank maintains that it does not anticipate any significant inflation or deflation issues for China.

Tesla experienced a significant outflow of investors following its earnings report, but Cathie Wood of Ark Invest remains firmly supportive of the electric vehicle manufacturer. In fact, Wood predicts that Tesla's shares could reach $2,000 by 2027.

Despite Elon Musk's quirks, which often attract attention (and lawsuits from the U.S. Securities and Exchange Commission), it is difficult to deny his business savvy.

Thursday saw a significant drop in Tesla shares, marking the stock's sharpest fall since July 24th, 2019, according to data from Bespoke Investment Group.

However, it is worth remembering that only last December, Tesla had its "worst month, quarter, and year on record," as stated in a previous article. It dropped to a 52-week low of $101.81 on January 6th of this year, yet managed to double in price and close above $200 in less than a month.

While Tesla is currently struggling, it is crucial to maintain a long-term perspective on the company. Cathie Wood believes that Tesla has a staggering 1,127% upside from Thursday's price, in agreement with Elon Musk's focus on sales volume over profit margins. Wood predicts that Tesla will play a significant role in, and benefit from, the future self-driving revolution, calling it "one of the most significant investment opportunities of our lifetimes."

Elon Musk's private spacecraft company, SpaceX, is once again at the forefront of the future. While the Starship rocket exploded during takeoff, such incidents are commonplace in spacecraft testing. In fact, even NASA Chief Bill Nelson commended SpaceX for its flight attempt, despite the explosion, which SpaceX calls a "rapid unscheduled disassembly."

Twitter, Musk's most controversial company, may also be aptly summarized as a "rapid unscheduled disassembly." However, investors need not worry, as Musk has already taken the company private.

In other markets, the Dow Jones Industrial Average fell 0.33%, the S&P 500 lost 0.6%, and the Nasdaq Composite sank 0.8%, primarily due to losses in technology stocks such as Nvidia's 2.96% decline and Meta's 1.22% drop. Most investors are concerned about shrinking margins, despite companies exceeding revenue expectations. However, this is not the case for Musk and Wood.