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NEW YORK (BLOOMBERG) – Tesla Inc.’s stock plummeted after Elon Musk said the electric car maker’s shares are too high in a series of tweets reminiscent of posts that securities regulators sued him in 2018.
The executive director posted more than a dozen times in less than 75 minutes on Friday (May 1), alleging that he is selling “almost all” of his physical possessions and that he will not own a home. It also renewed its call to reopen the economy.
Hours later, Tesla’s chief human resources officer for North America told employees that the permits will be extended for at least another week. The automaker’s shares fell 10 percent to close at $ 701.32.
Musk, 48, told the Wall Street Journal in an email that he was not joking and that his tweets were not examined before posting.
Tesla shares still rose 68% during the year, an advance that put him in a position to meet the final performance threshold he needs to receive stock options that would generate a windfall of approximately $ 730 million (S $ 1.03). billion).
“We consider these comments ironic and that Elon is Elon,” Dan Ives, an analyst at Wedbush Securities with a Tesla retention rating, said in an email.
“It certainly is a headache for investors venturing into this area, as their tweets remain a hot topic.”
Musk’s outburst on Twitter followed a profane tirade during Tesla’s first-quarter earnings call on Wednesday. He opposed closing orders aimed at containing the coronavirus, and told analysts he was concerned that he could not reopen the company’s assembly plant in Fremont, California. He compared refuge measures in place with forced incarceration.
“Musk is frustrated and has a boss when he’s under pressure to turn to Twitter,” Gene Munster, managing partner at Loup Ventures, said by phone. “It is his form of therapy. But he also has an agenda, which is to reopen the Fremont factory.”
The Tesla safety, health and environment team has been working “nonstop” on procedures to facilitate return to work, Valerie Capers Workman, North America’s chief human resources officer, said in an email to staff seen by Bloomberg. News. San Francisco Bay area counties this week extended their orders to stay home until the end of May.
In December, Musk joked that Tesla’s shares were “so high” when it rose above $ 420. That’s the price he said Tesla would go private in 2018, and the Securities and Exchange Commission of USA USA He said he chose the number to make a marijuana related prank that would impress his girlfriend.
On Friday, Musk said his girlfriend, musician Grimes, is now mad at him. They have a baby by Monday, he wrote.
Musk and Tesla each paid $ 20 million to settle the SEC fraud lawsuit the SEC filed in September 2018 over CEO tweets claiming it had the funds to take Tesla privately. But the dispute continued last year after Musk published that the company would make approximately 500,000 cars in 2019 without prior approval from a Tesla attorney.
The two sides amended their previous agreement that aimed to set limits on their tweet by adding specific topics Musk should not post about without prior approval.
Topics include the company’s financial condition, potential mergers or acquisitions, production and sales numbers, new or proposed business lines, previously unpublished projections and forecasts, and Musk’s purchase or sale of Tesla securities. .
While Musk’s remarks may have conflicted with the SEC deal, the agency may not reopen the case against him, according to Harvey Pitt, a former SEC president who now heads advisory firm Kalorama Partners.
“The SEC has bigger fish to fry,” Pitt said in an interview with Bloomberg Television.
Musk has made similar comments before about the overvaluation of Tesla’s shares. In May 2017, when Tesla had a market capitalization of approximately $ 50 billion, the CEO said it was higher than the company deserved.
“We can only guess at the motivations behind his tweet stream,” said Ben Kallo, an analyst at Robert W. Baird, in a note to clients. It has a price target of $ 700 for Tesla shares, but warns that there could be “significant uncertainty in the next 2-3 quarters” regarding the company’s efforts to restart production.
When asked if he was selling his possessions because he needed cash or was protesting, Musk replied that the answer was neither. He has long sought to reach Mars with his rocket company, Space Exploration Technologies Corp., and is pursuing that effort, and Earth, he wrote.
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