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Tesla shares? “Too expensive”. One tweet was enough to cut the value of the shares of the electric car house on Wall Street by more than 10%, sending up to $ 14 billion. An understandable collapse, given that the Twitter message that triggered the maximum drop came directly from the company’s owner, Elon Musk.
Tesla’s share price is too high
– Elon Musk (@elonmusk) May 1, 2020
The “puzzling” messages
Musk’s offensive message, founded by Tesla in 2003 with the goal of creating the world’s leading company in the electrical transformation of the automotive industry, has culminated in a series of tweets deemed “baffling” by the global media. Last Friday (with open markets) he first described as “fascist” the steps taken in the United States to curb the Covid-19 epidemic and ensure social estrangement (“Give people back their damn freedom,” wrote Musk, initially opposed the closure of the plant in California); therefore, he assured that he is preparing to sell all the “tangible assets” and that soon he will no longer be the owner of his house (which, among other things, had belonged to Gene Wilder. Musk also imposed two conditions on the property: “He cannot be razed or lose his soul”); Finally, he pointed to Wall Street, ensuring that Tesla’s stock price is “too high.”
I am selling almost all physical possessions. You will not own any house.
– Elon Musk (@elonmusk) May 1, 2020
The effects on the stock exchange
Wall Street’s reaction was immediate. The value of the shares immediately collapsed, falling 10% at the end of the day. $ 14 billion in capitalization has vanished. And this despite the excellent results announced in recent days: Tesala had announced, for the first quarter of 2020, a net profit of 16 million dollars (14.4 million euros, a year ago the loss had exceeded 700 million dollars). A “first time” that had led shares of the electric car house to break double-digit increases on the Nasdaq, with the shares once again reaching $ 800.
Now give people back their FREEDOM
– Elon Musk (@elonmusk) May 1, 2020
However, Tesla’s shares have risen more than 60% since the beginning of the year. Tesla’s market capitalization (approximately $ 130 billion) is almost double that of General Motors, Ford, and Fiat Chrysler combined, though these manufacturers sell millions of cars per year, and Tesla expects to sell half a million cars by 2020 (which It will continue to be the best year since its founding 17 years ago.)
Messages on social media and the prohibitions of Sec.
Musk is not new to “jaw-dropping” messages on social media, especially as the series from the past few hours recalls another 2018 message in which the South African businessman spoke of a possible withdrawal of Tesla from the stock market (exclusion from the list ). At the time, the SEC, the authority of the American stock exchange, at the end of an epic tug-of-war that lasted for several months, forced Musk to reduce positions within the company and prohibited Musk from launching posts and tweets on a whole series of sensitive issues (if not after the authorization of the board and the director of legal affairs of the company) to avoid influencing the course of the securities.
Clearly, in light of the SEC deals, Friday’s tweets are likely to cost the businessman dearly and raise further questions about the mental health of Musk, who in the past had had a nervous breakdown related to abuse. of a drug against ‘insomnia.
The super bonus ($ 600 million)
Musk’s launch on social media, however, may not be entirely insane. And this is what the hidden logic would be: at stake, in the first ten days of May, there is a super bonus (valued at least $ 600 million) that the company would guarantee its creator only under particular conditions: a certain level of income and earnings and an average capitalization in the last six months of at least $ 100 billion. All three conditions of the Tesla employer incentive plan (which has a total value of $ 55 billion and which in 2018 New York Time called the “boldest incentive plan in history”) would be verified at this time. . Of course, times are not exactly ideal, given that last week the number of Americans overwhelmed by the economic crisis caused by Covid-19 who applied for unemployment benefits increased to 30 million. In short, a “prize” that is between 600 and a billion dollars, at this stage, would be socially indefensible. However, a month and a half ago, Tesla’s share value had plummeted to last year’s lows, just above $ 300. A fact that removed Musk’s ability to redeem the first batch of incentives. Now, however, everything has changed. That is why it is not excluded that the strangest businessman of today masks (again) the forecast of insanity.
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