Elon Musk built his reputation and fortune juggling diverse businesses
Elon Musk built his reputation and fortune juggling diverse businesses — a skill that is being tested like rarely before as he seeks to abandon his deal for Twitter Inc., while confronting challenges at Tesla Inc. and his rocket company SpaceX.
Twitter on Tuesday sued Mr. Musk in Delaware Chancery Court to force him to follow through on the $44 billion takeover he agreed to in April and last week said he wanted to walk away from.
It sets the stage for a high-profile legal battle that could drag on for months or longer. Prior lawsuits have led to depositions of Mr. Musk and saw him take the stand.
Tesla and SpaceX didn’t respond to requests for comment.
Tesla, still the world’s most valuable auto maker by far, earlier this month reported its first sequential decline in quarterly deliveries in more than two years, largely reflecting supply-chain disruptions and an extended factory shutdown in China because of Covid-19-related lockdowns there.
Mr. Musk also recently described the company’s new plants in Germany and Texas as “gigantic money furnaces.”
The factories opened earlier this year, but the company has struggled to increase production at both, he said.
“Berlin and Austin are losing billions of dollars right now because there’s a ton of expense and hardly any output,” Mr. Musk said in a late May interview with a Tesla owners’ club.
Mr. Musk, who has been expressing concerns about the global economy, initiated a round of job cuts at the car maker last month.
Tesla’s production challenges, some of which have been largely out of the company’s control, threaten to waste a “golden opportunity” to get electric vehicles to market ahead of rivals, said Gene Munster, a managing partner at research and investment firm Loup Ventures.
“You just can’t give oxygen to your competitors,” said Mr. Munster, a longtime Tesla watcher whose firm doesn’t hold the company’s stock.
On Wednesday, Andrej Karpathy, a longtime executive who played a key role in developing Tesla’s advanced driver-assistance system known as Autopilot, said he was leaving the company.
Mr. Musk, on Twitter, thanked Mr. Karpathy for his contributions.
Last year, Mr. Musk warned that if a severe global recession dried up capital availability and liquidity while SpaceX was losing billions on its Starship rocket program and its satellite-broadband service, bankruptcy wasn’t impossible.
The space company was the busiest U.S. rocket-launch provider last year, handling both human flights and satellite missions.
The entrepreneur said he visited a company launch site in Texas after a fiery explosion on Monday under one of the company’s Super Heavy boosters.
Those towering vehicles underpin the Starship rocket system, which Mr. Musk has said Space Exploration Technologies Corp., as the company is formally known, plans to use for its most ambitious missions, including a prospective human voyage to Mars.
The National Aeronautics and Space Administration is also counting on a version of Starship to ferry astronauts to the surface of the moon as soon as 2025.
“Yeah, actually not good,” Mr. Musk wrote on Twitter in response to the explosion, saying a SpaceX team was assessing the damage.
He added that the booster’s base appeared sound, though SpaceX shut down the launchpad for safety reasons. Later, he tweeted: “Damage appears to be minor, but we need to inspect all the engines.”
Jeffrey Hoffman, an aerospace engineering professor at Massachusetts Institute of Technology and former astronaut, said SpaceX faces significant hurdles developing Starship, including showing that the engines clustered under its Super Heavy boosters are able to function as designed.
“The parallel operation of 33 rocket engines at the same time is a big deal,” he said, referring to the design.
SpaceX, alongside other satellite companies, is also embroiled in a regulatory battle against Dish Network Corp. and others as the Federal Communications Commission mulls new rules for the radio frequencies used to carry its signals.
Soaring inflation is weighing on both Tesla and SpaceX, Mr. Musk has said.