Elon Musk Distracted by Twitter, Should Focus on Tesla as EV Rivals Pick Up Pace, Investors Say in Survey

Right on cue, Tesla skeptics are pushing back after this year’s sizzling $500 billion (roughly Rs. 41,05,550 crore) rally.

Rival automakers pouncing on booming demand for electric vehicles pose the biggest challenge for Tesla over the next two years just as Elon Musk appears distracted thanks to his high-profile ventures, from social media and space travel to artificial intelligence.

So say respondents to the latest Markets Live Pulse survey. Out of 630 global MLIV Pulse contributors, 54 percent flagged the heightened risk of industry competition while 26 percent picked the behaviour and decisions of its mercurial chief as a key concern for Tesla shareholders.

“Musk is just such an unpredictable person, that I would count it among one of the top risks for Tesla,” Matthew Tuttle, chief executive officer of Tuttle Capital Management, said in an interview.

As profit margins thin, some 67 percent of survey participants said the billionaire executive should focus more on the carmaker. Their warning comes in the wake of a seemingly improbable 128 percent Tesla rally this year, fuelled by renewed investor appetite for the tech megacaps and Musk’s prediction that the era of fully autonomous vehicles is nigh.

Even though Tesla currently enjoys sizable lead over other companies, be it an established carmaker or a startup, a big part of its remarkably high market valuation rests on the assumption that it will be able to maintain this dominance in a future where EVs are more commonplace.

Yet Tesla rivals are picking up the pace. Just earlier this month, China’s BYD set a sales record for the second quarter, and delivered 352,163 fully electric vehicles. That shows how rapidly it has gained ground on Tesla, which handed over 466,140 EVs to customers worldwide — also an all-time high.

The counterargument goes that a slew of Tesla’s rivals are still struggling with teething issues. For instance, Ford Motor’s US electric vehicle sales fell in the second quarter, after it had to pause production early this year at the Mexican factory that builds the Mustang Mach-E.

Despite that, analysts and investors warn that Tesla’s current advantage can erode quickly as government policies like the US’s Inflation Reduction Act encourage other automakers to embrace EVs. With competitors stepping up their game, Tesla’s famously expensive shares — trading at 75 times forward earnings — leave little room for error. In comparison, GM trades at about 6 times of estimated profits and Ford at about 9 times.

“Competition is the most important risk factor for Tesla longer term, and even mediocre execution for the crop of around 100 new EVs coming to market this year will put pressure on Tesla,” said Craig Irwin, analyst at Roth Capital Partners. “The current lead over competition is very real, but we need to understand how this shrinks.”

Defending the market share comes with a cost. Around 63 percent of the MLIV Pulse respondents expect the company to continue to lower prices in order to capture higher volumes. As a result, its hefty profit margin is already taking a hit. More cuts will likely leave the margins even thinner, and narrow the gap with other auto companies.

The impact of all the recent price cuts on Tesla’s profits will be clear this Wednesday when the company reports second-quarter results. The average profit estimate for the quarter has come down 29 percent from where they were six months ago.

“Winning stocks grow revenue and margins. Both are necessary,” said Nicholas Colas of DataTrek Research.

Meanwhile the “Musk-risk” embedded in Tesla shares came into a sharp focus last year when the billionaire engaged in a highly public bid for social-media platform Twitter, and sold off big chunks of Tesla stock to pay for the acquisition. The pressure from the sales and worries that Musk had become too distracted to run Tesla weighed heavily on the shares at that time.

Since then, Twitter’s own value has dwindled as well. About 67 percent of the survey respondents said they don’t expect Twitter will ever be worth as much as Musk paid for it.

© 2023 Bloomberg LP


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Tesla Rolls Out First Cybertruck After Two-Year Delay: All Details

US automaker Tesla on Saturday announced that its first electric pickup — a slick-looking silver Cybertruck — had rolled off the assembly line at its huge plant near Austin, Texas.

“First Cybertruck built at Giga Texas!” says a tweet from the company, accompanied by a photo of the futuristic vehicle amid a sea of helmeted and yellow-vested Tesla workers.

Elon Musk, who owns both Tesla and Twitter, reposted the tweet with the comment “Congrats Tesla Team.”

Tesla did not immediately respond to an AFP request for comment on Saturday.

The company had promised in April that it would be rolling out the first Cybertrucks before the end of the year. 

Plans for the vehicle, with its silvery, tortoise-like shape and unusual angles, were first announced in November 2019.

Its original introduction went awry when Musk urged a Tesla employee to strike one of the prototype’s windows with a hunk of steel to show its solidity. The window broke — drawing a laugh and a curse word from Musk — as did a second window on an ensuing attempt.

Yet within two days, Tesla said it had received nearly 150,000 advance orders.

In May, Musk said the company hoped to build 250,000 of the trucks a year — a number he said could eventually double, given a relatively accessible price tag.

Tesla will be making three models of the Cybertruck, a vehicle that can accelerate from zero to 60 miles per hour (100 kilometers per hour) in less than three seconds. The basic model will cost $39,900 (roughly Rs. 32,03,700) and offer a 250-mile range between charges; the top-line truck will have twice that range and sell for $69,900 (roughly Rs. 57,41,900).


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(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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Elon Musk Launches AI Startup xAI With Team of Former Google, OpenAI Engineers

Musk in March registered a firm named X.AI Corp, incorporated in Nevada, according to a state filing. 

By Reuters | Updated: 12 July 2023 22:32 IST

Billionaire Elon Musk‘s xAI on Wednesday announced the formation of the artificial intelligence (AI) startup with the launch of its website, unveiling a team made up of engineers who have worked at companies from Alphabet-owned Google to Microsoft and OpenAI.

The startup will be led by Musk, the CEO of Tesla and owner of Twitter, who has said on several occasions that the development of AI should be paused and that the sector needs regulation.

“Announcing formation of @xAI to understand reality,” Musk said in a tweet on Wednesday.

The website said xAI will hold a Twitter Spaces event on July 14.

Musk in March registered a firm named X.AI Corp, incorporated in Nevada, according to a state filing. 

The firm lists Musk as the sole director and Jared Birchall, the managing director of Musk’s family office, as a secretary.

© Thomson Reuters 2023


From the Nothing Phone 2 to the Motorola Razr 40 Ultra, several new smartphones are expected to make their debut in July. We discuss all of the most exciting smartphones coming this month and more on the latest episode of Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.
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Elon Musk Sues Law Firm Wachtell to Recover Fees From Twitter Buyout

Elon Musk has sued the elite law firm Wachtell, Lipton, Rosen & Katz to recover most of a $90 million (roughly Rs. 743 crore) fee it received from Twitter for defeating his bid to walk away from his $44 billion (roughly Rs. 3,37,465 crore) buyout of the social media company.

The complaint by Musk’s X Corp, which owns Twitter, was filed on Wednesday in the California Superior Court in San Francisco.

Musk accused Wachtell of exploiting Twitter by accepting, in the final days before Oct. 27, 2022, buyout closed, huge “success” fees doled out by departing Twitter executives who were grateful that Musk would be forced to close.

The world’s richest person, who also runs Tesla and SpaceX, called the $90 million (roughly Rs. 743 crore) payout “unconscionable,” given that Wachtell had billed less than one-third that sum for its few months of work on the Delaware lawsuit.

“Wachtell arranged to effectively line its pockets with funds from the company cash register while the keys were being handed over” to Musk, the complaint said.

Musk wants to recoup “excess” fees that Wachtell charged under an agreement signed on the day of closing by one of its partners and Twitter’s chief legal officer Vijaya Gadde.

The complaint also quoted former Twitter director Martha Lane Fox who, upon learning how much lawyers would be paid, emailed general counsel Sean Edgett: “O My Freaking God.”

Wachtell did not immediately respond to requests for comment. Gadde, Fox and Edgett are not parties to the lawsuit.

Twitter has been involved in a slew of actual or threatened litigation since Musk’s buyout.

These include many lawsuits by landlords, vendors and consultants accusing Musk of stiffing them on bills, and a threatened lawsuit by Twitter against Mark Zuckerberg’s Meta Platforms over the latter’s new Threads app.

Wachtell is no stranger to lawsuits by billionaires over buyouts, having spent years litigating with Carl Icahn over his 2012 hostile takeover of CVR Energy.

In 2018, a judge dismissed a malpractice claim by Icahn, who found himself on the hook to pay banks that helped defend CVR against the takeover higher fees than if the merger failed.

The case is X Corp v Wachtell, Lipton, Rosen & Katz, California Superior Court, County of San Francisco, No. CGC-23-607461. 

© Thomson Reuters 2023  


From the Nothing Phone 2 to the Motorola Razr 40 Ultra, several new smartphones are expected to make their debut in July. We discuss all of the most exciting smartphones coming this month and more on the latest episode of Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.
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Meta’s ‘Friendly’ Threads Collides With Unfriendly Internet

Mark Zuckerberg has pitched Meta’s Twitter copycat app, Threads, as a “friendly” refuge for public discourse online, framing it in sharp distinction to the more adversarial Twitter which is owned by billionaire Elon Musk.

“We are definitely focusing on kindness and making this a friendly place,” Meta CEO Zuckerberg said on Wednesday, shortly after the service’s launch.

Maintaining that idealistic vision for Threads – which attracted more than 70 million users in its first two days – is another story.

To be sure, Meta Platforms is no newbie at managing the rage-baiting, smut-posting internet hordes. The company said it would hold users of the new Threads app to the same rules it maintains on its photo and video-sharing social media service, Instagram.

The Facebook and Instagram owner also has been actively embracing an algorithmic approach to serving up content, which gives it greater control over the type of fare that does well as it tries to steer more toward entertainment and away from the news.

However, by hooking up Threads with other social media services like Mastodon, and giving the appeal of microblogging to news junkies, politicians, and other fans of rhetorical combat, Meta is also courting fresh challenges with Threads and seeking to chart a new path through them.

For starters, the company will not extend its existing fact-checking program to Threads, spokesperson Christine Pai said in an emailed statement on Thursday. This eliminates a distinguishing feature of how Meta has managed misinformation on its other apps.

Pai added that posts on Facebook or Instagram rated as false by fact-checking partners – which include a unit at Reuters – will carry their labels over if posted on Threads too.

Asked by Reuters to explain why it was taking a different approach to misinformation on Threads, Meta declined to answer.

In a New York Times podcast on Thursday, Adam Mosseri, the head of Instagram, acknowledged that Threads was more “supportive of public discourse” than Meta’s other services and therefore more inclined to draw a news-focused crowd, but said the company aimed to focus on lighter subjects like sports, music, fashion, and design.

Nevertheless, Meta’s ability to distance itself from the controversy was challenged immediately.

Within hours of launch, Threads accounts seen by Reuters were posting about the Illuminati and “billionaire satanists,” while other users compared each other to Nazis and battled over everything from gender identity to violence in the West Bank.

Conservative personalities, including the son of former US President Donald Trump, complained of censorship after labels appeared warning would-be followers that they had posted false information. Another Meta spokesperson said those labels were an error.

INTO THE FEDIVERSE

Further challenges in moderating content are in store once Meta links Threads to the so-called fediverse, where users from servers operated by other non-Meta entities will be able to communicate with Threads users. Meta’s Pai said Instagram’s rules would likewise apply to those users.

“If an account or server, or if we find many accounts from a particular server, is found violating our rules then they would be blocked from accessing Threads, meaning that server’s content would no longer appear on Threads and vice versa,” she said.

Still, researchers specializing in online media said the devil would be in the details of how Meta approaches those interactions.

Alex Stamos, the director of the Stanford Internet Observatory and former head of security at Meta, posted on Threads that the company would face greater challenges in performing key types of content moderation enforcement without access to back-end data about users who post banned content.

“With federation, the metadata that big platforms use to tie accounts to a single actor or detect abusive behavior at scale isn’t available,” said Stamos. “This is going to make stopping spammers, troll farms, and economically driven abusers much harder.”

In his posts, he said he expected Threads to limit the visibility of fediverse servers with large numbers of abusive accounts and apply harsher penalties for those posting illegal materials like child pornography.

Even so, the interactions themselves raise challenges.

“There are some really weird complications that arise once you start to think about illegal stuff,” said Solomon Messing of the Center for Social Media and Politics at New York University. He cited examples like child exploitation, nonconsensual sexual imagery, and arms sales.

“If you run into that kind of material while you’re indexing content (from other servers), do you have a responsibility beyond just blocking it from Threads?” 

© Thomson Reuters 2023 


From the Nothing Phone 2 to the Motorola Razr 40 Ultra, several new smartphones are expected to make their debut in July. We discuss all of the most exciting smartphones coming this month and more on the latest episode of Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.
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Threads App Sees Over 50 Million Users Sign Up Within a Day as Instagram’s Competition With Twitter Heats Up

Threads, the new “Twitter Killer” app from Meta that was launched on Thursday, now has 50 million users — just over 24 hours since the app was rolled out. The text-based microblogging service is closely tied to Meta’s popular photo and video sharing service, Instagram. While the brisk rise of Threads is impressive, it is worth noting that Meta is using its user base of over 2.35 billion active users on Instagram to get users to sign up for Threads. Meanwhile, rival Twitter has already begun to feel the heat, with the recently appointed CEO issuing a statement, while the service has reportedly threatened to sue Meta.

On Friday, The Verge’s Alex Heath stated in a Threads post that the app had surpassed 48 million user registrations, citing internal data from Meta. Another Threads user, Joe Scannell (Threads: @joe_scannel), posted a screenshot of a recent Threads sign-up number that showed the figure has now crossed the 50 million mark. As part of Meta’s push to get users to sign up and use the service, it displays a serial number on the Instagram profile of each user — indicating when they signed up for the service.

Threads is the top app on the App Store in India and other countries including the US

 

It’s worth noting that while Threads was launched on the App Store and Google Play store simultaneously on Thursday, the app isn’t available in every country. Meta hasn’t rolled out the service to users in the EU, presumably due to stringent privacy regulations in the region.

The app has risen to the top of app stores in multiple countries — in India, the top free apps on iOS are Threads, followed by WhatsApp and Instagram. The Threads app reportedly rose to the fifth position in the App Store in China, where Meta’s other apps are currently blocked — Threads is expected to meet the same fate.

As of Thursday, the Threads app had over 95 million posts and which had garnered a total of 190 million likes on the platform, The Verge reported. It appears that Elon Musk’s Twitter has begun to feel the heat. The platform has reportedly threatened Meta with legal action in a letter sent by Twitter’s lawyer Alex Spirt to Meta CEO Mark Zuckerberg.

Meanwhile, Twitter’s new CEO Linda Yaccarino tweeted on Thursday after the meteoric rise of the new Threads app, stating that the Twitter community was built by users and that it was “irreplaceable”. “We’re often imitated — but the Twitter community can never be duplicated,” she added.

Threads’ user base is expected to grow over the coming day, but the service currently lacks features that users are accustomed to on other platforms, such as the ability to see a chronological feed or the ability to send private messages (or DMs). Meanwhile, the company’s support documents state that you cannot delete your Threads account without deleting your Instagram account — showing how closely the two are linked.


From the Nothing Phone 2 to the Motorola Razr 40 Ultra, several new smartphones are expected to make their debut in July. We discuss all of the most exciting smartphones coming this month and more on the latest episode of Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.
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Twitter Threatens to Sue Meta Over Threads: Report

Twitter is threatening legal action against Meta Platforms over its new Threads platform, Semafor reported on Thursday, citing a letter sent to the Facebook parent’s CEO Mark Zuckerberg by Twitter‘s lawyer Alex Spiro.

“Twitter intends to strictly enforce its intellectual property rights, and demands that Meta take immediate steps to stop using any Twitter trade secrets or other highly confidential information,” Spiro wrote in the letter.

Meta launched Threads on Wednesday as the social media firm looks to take on Elon Musk’s Twitter by taking advantage of Instagram’s billions of users.

Meta and Spiro did not immediately respond to Reuters requests for comment.

Meanwhile, Analysts have said Threads’ ties to Instagram might give it a built-in user base and advertising apparatus. That could siphon ad dollars from Twitter at a time when its new CEO is trying to revive its struggling business.

While Threads launched as a standalone app, users can log in using their Instagram credentials and follow the same accounts, potentially making it an easy addition to existing habits for Instagram’s more than 2 billion monthly active users.

“Investors can’t help but be a little excited about the prospect that Meta really has a ‘Twitter-Killer’,” said Danni Hewson, head of financial analysis at investment firm AJ Bell.

Others saw the launch of Threads as an opportunity to create a less toxic version of Twitter.

“May this platform have good vibes, strong community, excellent humor, and less harassment,” Ocasio-Cortez said in her post.

Much like Twitter, the app features short text posts that users can like, re-post and reply to, although it does not include any direct message capabilities. Posts can be up to 500 characters long and include links, photos and videos up to five minutes long, according to a Meta blog post.

It is available in more than 100 countries on both Apple’s App Store and Google’s Play Store, the blog post said.

© Thomson Reuters 2023


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