Quoted: Investing in Elon Musk’s companies can be an adventure

“This is not a story that plays out in a quarter.”

Nancy Pfund, managing partner of DBL Partners, a venture capital firm that was an early investor in Elon Musk companies SpaceX, Tesla Motors and SolarCity. Pfund says investing in Musk’s companies is “not for the faint of heart.”

This week was a perfect example, when two of those companies (the ones that are publicly traded) reported earnings and their stock and investors went on a roller-coaster ride. They weren’t alone — picture Musk’s wallet as an accordion.

Tesla, which reported earnings Wednesday, lost $320 million in the final quarter of 2015 and $889 million for the year. Still, the Palo Alto electric-car maker saw its shares jump 14 percent in after-hours trading that day — people liked Musk’s declaration that the company would turn a profit in the final quarter of this year, and got excited about the upcoming unveiling of the mass-market Model 3 and the company’s expectation of delivering up to 90,000 vehicles in 2016. Thursday, Tesla shares see-sawed and closed up 4 percent. Today, they’ve been down as much as 4.22 percent but are down slightly at the moment, at just under $150.

Tesla shares are down about 37 percent for the year. As recently as last July, they closed as high as $282.26.

[graphiq id=”kSjuoExkPwF” title=”Tesla Motors Inc. (TSLA)” width=”700″ height=”520″ url=”https://w.graphiq.com/w/kSjuoExkPwF” link=”http://listings.findthecompany.com/l/12234646/Tesla-Motors-Inc-in-Palo-Alto-CA” link_text=”Tesla Motors Inc. (TSLA) | FindTheCompany”]

Meanwhile, SolarCity stock got clobbered in after-hours trading Tuesday after it reported a greater-than-expected fourth-quarter loss plus a not-so-sunny forecast for the current quarter. The solar-panel company’s CEO Lyndon Rive, a cousin of company Chairman Musk, cited a regulatory issue in Nevada that caused the company to pull out of that state recently as one reason for its weak Q1 guidance.

San Mateo-based SolarCity’s shares are trading at $17.60 today, up about 5.5 percent but a 33 percent plunge since Tuesday’s earnings report. They are down about 65 percent so far this year.

[graphiq id=”4oiMd8Id7mt” title=”Solarcity Corporation (SCTY)” width=”700″ height=”487″ url=”https://w.graphiq.com/w/4oiMd8Id7mt” link=”http://listings.findthecompany.com/l/15984994/Solarcity-Corporation-in-San-Mateo-CA” link_text=”Solarcity Corporation (SCTY) | FindTheCompany”]

What’s all this doing to Musk’s paper fortune? Wednesday, USA Today estimated that Musk was out about $3.5 billion since the end of last year. But don’t cry for Silicon Valley’s Iron Man. According to Forbes, which has a real-time net worth tracker, Musk is still worth a cool $10.6 billion.

And his fans are keeping the faith. Back to Pfund, who told Reuters: “He’s the Mount Everest of innovative visionary minds. He has a tolerance and an ability to move the big ideas forward without getting cowed by those that would settle for a smaller vision.”

 

Photo: Elon Musk at the Tesla factory in Fremont, Calif. on Saturday, Oct. 1, 2011, when customers who had Model S reservations came to tour the factory and test-drive a beta model. (Jim Gensheimer/Bay Area News Group)

 

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  • David Huang

    What is his next vision? EPlane! I hate to be in EP in the sky, if ever Mr. Musk build one. Let capital Elon and his investors on the maiden test flight. Hahaha.

    • Stephen Pace

      Elon has a long track record of success. People laughed about reusable rockets too but ULA and the Russians aren’t laughing now.

 
 
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