Elon Musk is playing some of his greatest — and most bizarre — hits: manipulating Tesla’s stock price, questioning the coronavirus pandemic, and being generally chaotic on Twitter.
Truly, what is up with Elon Musk
Elon Musk declared he’s selling all his possessions, and Tesla’s stock price dropped 10% in a matter of minutes.
Emily Stewart covered business and economics for Vox and wrote the newsletter The Big Squeeze, examining the ways ordinary people are being squeezed under capitalism. Before joining Vox, she worked for TheStreet.
On Friday, the South African-born entrepreneur fired off a series of missives on Twitter. He declared he’s selling all of his possessions and his home, again called to free America from coronavirus lockdowns, and said Tesla’s stock price is too high.
Beyond the obvious “just what in the world is going on with Elon Musk” sentiment, Tesla investors are probably less than thrilled with his online adventures. The electric car company’s stock price dropped by about 10 percent.
Well known for being unpredictable, Musk, 48, has a knack for injecting even more uncertainty into already uncertain times. Amid the coronavirus crisis, he’s been all over the map — he first said the panic over the global pandemic was dumb, then decided it was serious and wanted to help, and is now, like the protesters at state capitols demanding an end to social distancing rules, calling for the country to be freed from protective measures.
Musk also got into hot water over tweeting about Tesla before and causing major moves in the price of its stock. He’s supposed to have some guardrails in place now around his social media activities , but apparently, the Tesla chief executive is not paying too much attention to them.
After his little tweetstorm on Friday, Musk noted that his girlfriend, the musician Grimes, is mad at him. Tesla investors probably are, too.
Some people speculated that Musk’s account had been hacked. It’s unclear if that’s the case. Twitter declined to comment on the tweets, and Tesla didn’t return a request for comment.
If this feels like déjà vu, it’s because it is
So here is the thing: It is possible that Musk is right that Tesla’s stock is overvalued. According to the Wall Street Journal, most analysts who follow the stock have it as a hold or a sell, meaning they’re not recommending buying it. Even with Friday’s dip, Tesla’s stock price was up about 70 percent year-to-date by the early afternoon.
That being said, Tesla has also reported a profit for three consecutive quarters, including its first-quarter earnings release, which came out this week and sent the stock up about 9 percent.
But whatever the merits of Tesla’s stock valuation, that’s not the point. The point is, CEOs don’t send out tweets about their stock prices at all, let alone saying they’re too high. And what’s more, this is not the first time Musk has found himself in a stock price-related pickle with regard to Tesla.
In the summer of 2018, Musk tweeted that he was considering taking Tesla private at $420 and declared he had secured funding for such a deal. In turn, the company’s share price shot up to the point that the Nasdaq stock exchange halted the stock altogether for a while.
After this, Tesla tried to do some clean-up and explained that Musk had talked to Saudi Arabia’s sovereign wealth fund about some potential funding, but it wasn’t sufficient. The US Securities and Exchange Commission sued Musk for misleading investors with his tweet, and in September 2018, the parties reached a settlement. It required Musk to step down as Tesla’s chair; Tesla and Musk paid $40 million in penalties; and the company hired a lawyer to monitor his communications, including the tweets.
Musk got into Twitter trouble again in February 2019, and in April of that year, an updated settlement also attempted to clamp down on Musk’s social media use and was supposed to stop him from tweeting about things that could move the company’s stock price. Judging by Musk’s Friday internet adventures, it appears he’s not super concerned about running afoul of the SEC again.
Elon’s gonna Elon, but maybe he could Elon less
Musk isn’t alone in being weird on Twitter. But the issue is that what he says and does there and elsewhere in public have very real implications. For one thing, people listen to him on the coronavirus front, so if he’s saying it’s a joke or suggesting the lockdowns need to be ended, others could follow suit.
And while investors aren’t always the most sympathetic class, a loose-cannon CEO who can cost you a ton of money — especially with the stock market and economy being especially volatile right now — is not doing you any favors. Perhaps especially in Musk’s case, many of Tesla’s investors have parked their money there because of Musk, because they’re fans of his and they believe in his abilities. With a single tweet, Musk then harmed a lot of people who are rooting for him and for his company. Musk also has an obligation to his employees to be responsible with the company’s future.
Ultimately, Elon’s gonna Elon, as he’s proven time and time again. He seems to be working out some stuff on Twitter, and I guess hopefully he’s okay.
