(TheStreet) - Elon Musk has heard the critics.
Though he does not admit to having neglected the manufacturer of electric vehicles Tesla (TSLA) - Get Free Report since he decided to buy Twitter, the whimsical and charismatic visionary seems to now be responding to recently strong criticism from individual investors.
In the face of Tesla's stock market rout, some of those Musk-worshiping shareholders have started calling for a shake-up or a new CEO to lead the company. These calls, which stem from their frustration, seem to have shaken Musk, who has finally decided to step down as CEO of Twitter.
The billionaire now wants to reassure these shareholders. That's what he just did trying to show them that he remains true to himself. The whimsical and charismatic entrepreneur continues to dream high for Tesla.
He has just renewed an overly ambitious prediction he made a few months ago, that Tesla was going to be the largest company in the world in terms of market capitalization. He estimates that the maker of the Model S will have a market value exceeding that of Apple (AAPL) - Get Free Report and oil giant Saudi Aramco combined.
Tesla Will Be World's Most Valuable Company
"Several years ago, I said I thought it was possible for Tesla be worth more than Apple, which was then the highest [capitalization] company I think on the market at the time," the billionaire told analysts during the Tesla third-quarter-earnings call on October 19. "I said it required incredible execution [and] at least some luck. And we didn't even intend to achieve that."
He continued: "Now I have the opinion that we can far exceed Apple's current market cap. In fact, I see a potential path which has us [Tesla] to be worth more than Apple and Saudi Aramco combined."
"That doesn't mean it will happen or that will be easy. In fact, I think it will be very difficult; it will require a lot of work. Some very creative new products, madness expansion."
"For the first time, I see a way for Tesla to be, let's say, roughly twice the value of Saudi Aramco," Musk added. "This is the first time I'm seeing that potential."
At the time, Apple, the world's most valuable company, had a market value of $2.34 trillion, according to companiesmarketcap.com. Saudi Aramco, which has benefited from soaring oil prices, had a market value of $2.1 trillion. Between them, the two largest companies in the world were worth $4.5 trillion.
Tesla had a market capitalization of more than $665 billion. The manufacturer of electric vehicles had at one point passed the symbolic valuation threshold of $1 trillion.
More than two months later, Musk remains undeterred. He claims that Tesla will be the most valuable company in the world soon.
"I am fairly confident that will happen; I cannot predict the valuation on the way there; I think Tesla could be the most valuable company within 5 years," the tech mogul said during a conversation on Twitter Spaces on December 22.
The problem is that, since his first prediction, Tesla completely plummeted in the stock market. The electric vehicle maker has a market value of $396 billion at last check, compared to Apple's $2.1 trillion and Saudi Aramco's $1.82 trillion.
No More Sales of Tesla Shares
Musk also sent another message to shareholders. The billionaire has promised that he will not sell any more Tesla shares until 2025.
"I won't sell stock until -- I don't know -- probably two years from now, definitely not next year under any circumstances, and probably not the year thereafter," the billionaire said in response to a question from investor Ross Gerber, who called him out several times in the past few days.
The problem with this promise is that Musk has made similar commitments in the past only to end up breaking them. He sold at least $30 billion worth of Tesla stock this year to fund the $44 billion acquisition of Twitter. Specifically, he sold about $8.5 billion in Tesla shares in April and $6.9 billion in August. In November, he sold an additional $3.95 billion worth of Tesla stock. His stake in Tesla has thus decreased and now stands at 13%, according to Bloomberg.
"No further TSLA sales planned after today," Musk said last April, but ended up offloading more shares.
Also in that conversation in Twitter Spaces, the billionaire dismissed the idea that he neglected Tesla: "There's not a single important Tesla meeting that I've missed this entire time, so it's not like I'm totally missing in action."
Finally, Musk told worried Tesla shareholders that the automaker will weather the upcoming economic storm, maybe better than most companies.
By Luc Olinga
December 23, 2022
