Silicon Valley tech giants are among the few winners of the global pandemic. With their share prices holding or even rising, investors are betting they will come out of the crisis even stronger.
But Covid-19 has also shed light on two tech moguls with radically different approaches to the fight against the virus: Elon Musk and Mark Zuckerberg.
The contrast was seen in the way the two men approached what is usually a sober, perhaps even sleepy, environment of an analyst conference call following their latest financial results.
Over the past few weeks, Tesla’s founder has tweeted in an increasingly subdued manner.
He initially expressed skepticism about the threat from the coronavirus. He then denounced what he saw as excessive measures taken to combat it.
The California shutdown meant the closure of its main manufacturing plant in Fremont, and Mr. Musk wants it to reopen.
“Bravo, Texas,” he tweeted yesterday, referring to the state cap report.
Then came a big statement in capital letters: FREE AMERICA NOW.
But it was during an analyst call, following results that delivered a surprise profit during the first quarter, that his temper flared.
Musk made no mention of the virus in his opening statement. But in response to questions, he railed against California’s stay-at-home order:
“To say they can’t leave their home and will be arrested if they do is fascistic. This is not democratic. This is not freedom. Give people their damn freedom back.”
At some point, his statements became even more extreme.
He said expanding segregation policies “forcibly imprisons people in their homes against all their constitutional rights.”
He added: “Destroying people’s freedoms in terrible and wrong ways is not what people came to America to do or built this country.”
He then used a strong expletive – which it’s safe to say I’ve never heard on a public conference call – before continuing: “Sorry. But ugliness is ugliness.”
There was a lot of indignation in response. Not from analysts who kept asking about the app’s gross margins and rollout, but from observers on Twitter.
Some pointed out that the Tesla tycoon was far from prescient in his analysis of the threat from the virus.
On March 19, he noted that there were no new cases in China and added: “Based on current trends, it is possible that new cases in the US will also approach zero by the end of April.”
To date, the United States has reported more than a million coronavirus cases and nearly 60,000 deaths.
Meanwhile, the Facebook founder spoke about his company’s latest results, which saw profits fall but still managed to please investors despite warnings that the business was “facing a period of unprecedented uncertainty.”
Mark Zuckerberg’s speech on his conference call with analysts was not as strong as Elon Musk’s.
But he has been quite outspoken in promoting a contrary view to that of tycoon Tesla. According to him, the desire to return to normal life was a very bad idea for both public health and the economy.
“Despite the huge social costs caused by current lockdown restrictions, I worry that reopening certain places too quickly before infection rates have been reduced to minimal levels will all but guarantee future outbreaks and worsen long-term health and economic outcomes. “
Now, one could argue that it’s easier for Mark Zuckerberg to take this position – his employees can do a good job keeping Facebook ticking from home, while Tesla employees won’t be building cars in their backyards.
While the social network may be concerned about falling advertising, it is weathering the downturn much better than legacy media companies. This is reflected in its share price, which has declined only slightly since February.
Keep in mind, Tesla stock continues to defy gravity. You might think that with the main plant closed, the low price of oil making electric cars less attractive, and a chief executive seemingly incapable of self-control, investors would be heading for the mountains.
But no, the stock has already recovered near its all-time high and should move higher after the latest results.
Tesla, which sold 367,500 vehicles in 2019, is now valued by the market at $150 billion. That’s almost four times more than giant US manufacturer GM, which sold about 7.7 million vehicles last year.
All this means Elon Musk could be on the hook for a huge payout. He hopes to achieve goals set by his board to increase the company’s value, giving him the opportunity to earn about $740 million in stock options.