Good week for Elon Musk and another bad week for Jacob Zuma
The magic touch of Tesla founder and CE Elon Musk in attracting the best brains and investors has resulted in shares in the electric car maker rising 7% to US$49bn, overtaking iconic old-era Ford ($46bn) in market value. The jump came after Tesla announced it had delivered over 25,000 cars in the first quarter — a 70% year-on-year increase. It’s still only a fraction of Ford’s output — 6.7m vehicles last year — but investors clearly see growth potential in Tesla, which some believe has replaced BMW as an aspirational car.
President Jacob Zuma’s cabinet reshuffle — essentially the irrational axing of finance minister Pravin Gordhan — provoked the first of what’s likely to be a series of rating agency downgrades of the sovereign. The rand fell 10% in the week, bond yields spiked, business and investor confidence eroded further, and SA’s economic growth outlook hit rock bottom. But there was not a flicker of doubt in Zuma’s cold eyes, even as calls for his removal grew and his destruction of the ANC and Mandela’s legacy caused national anxiety.