Billionaire Elon Musk has sparked widespread anger with his efforts to illegally shut down entire government agencies without any congressional authorization, but Slate columnist David Zipper believes that there is a simple way to significantly hurt Musk through a consumer boycott of his electric car company.
While not buying a Tesla may not seem like a revolutionary act, Zipper believes that the company is already showing major signs of vulnerability that a full-fledged boycott could tip into a major crisis.
"Musk’s stake in Tesla comprises the lion’s share of his wealth," he argues. "He can laugh off a few protesters, but if consumers launch a sustained boycott, both Musk and his car company could find themselves in dire straits. Tesla was already in a precarious position before Musk’s flirtation with the far right turned into an all-out embrace. Nosediving sales would be an incapacitating blow."
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Zipper then outlines some of Tesla's glaring vulnerabilities by pointing to its stock shares' high price-to-earnings ratio relative to other car companies, which indicates that its stock is currently overvalued and could get absolutely walloped if its sales started to significantly decline.
"Consider: If Tesla’s price-to-earnings ratio fell from 181 to 50 — a figure still at least eight times as high as Toyota’s or Ford’s — its stock price would tumble 70 percent," he muses.
He then adds that Tesla sales figures in Europe have absolutely cratered in recent months as Musk has taken to promoting far-right political parties in Germany and the United Kingdom, and he argues that a similar plunge in the United States would prove devastating.
"If the value of his Tesla stock falls, lenders could force Musk to sell additional shares," he explains. "Many Tesla investors (and his fan base) may see that as a vote of no confidence in the company’s future, prompting them to sell shares—triggering a full-on Wall Street rout, with Tesla’s stock crashing in value."
