Elon Musk tweet wipes $14bn off Tesla's value

https://www.bbc.com/news/business-52504187

by abhi3 • 6 years ago

78 115 6 years ago

I have to wonder if his tweets are actually pre-screened per the prior SEC violation settlement. Sure seems like not with something like this appearing.

clouddrover2• 6 years ago

The Wall Street Journal says:

Asked later if the tweet was vetted or made in jest, the CEO said: “No.”

https://www.wsj.com/articles/tesla-stock-falls-after-ceo-twe...

_Microft2• 6 years ago

I am selling almost all physical possessions. Will own no house. — Elon Musk (@elonmusk) May 1, 2020

Did his fortune cookie say "When you can not be free to do things, be free from things instead" or what? ><

His vision for and achievements with both Tesla and SpaceX are amazing but I am afraid that one day one of these shenanigans will be his undoing which would be pretty sad because I really want to see Mars colonization happening.

sk5t• 6 years ago

A fortune cookie is one possibility, or perhaps this particular fortune was written on blotter paper.

2019-nCoV• 6 years ago

Once you reach Musk levels of wealth can you imagine how paralysing possessions are?

Most become enamoured with distractions as their means rise. But instead of choosing colours for the kitchen renovation or which BMW defines them as a person, we're talking about how many sprawling villas to build and which private tropical island to buy to build them on.

An ascetic approach will increase the odds of Musk seeing Mars in his lifetime.

hobofan• 6 years ago

An ascetic approach will increase the odds of Musk seeing Mars in his lifetime.

I doubt the few millions he would make from selling possessions make a big difference when compared to the billions in Tesla and SpaceX.

yongjik• 6 years ago

Wow, I just visited https://twitter.com/elonmusk and...

"Tesla stock price is too high imo" is one of the tamer tweets.

I am selling almost all physical possessions. Will own no house.
Now give people back their FREEDOM
Rage, rage against the dying of the light of consciousness

(OK, the last one is apparently a quote from a poem, still...)

Sound more like tweets of a Hollywood celebrity who had one too many glasses of martini...

dogma11382• 6 years ago

He is more like a rogue chat bot that was trained on 4chan at this point.

jariel4• 6 years ago

Clearly he's having a lot of fun and saying wierd things - which is fine.

But the Tesla statement is way crazier than the rest because it's a material statement about the potential future earnings of the company.

Musk is a 'deep insider' who knows 'everything' about the company. When he says 'the stock is overvalued' - what does that really mean?

Did Tesla just lose a huge market? Was there a big accident we don't know about? Is there some huge hidden liability? Are sales forecasts way down? Did a deal fall through? Are they getting sued?

He's the CEO so those statements really matter.

I think we can give him a lot of leeway and expect that he say some funny things.

But when people give him billions of dollars ... he can't mess around with that, it's irresponsible. Especially since he's already in trouble with the SEC. It eats away at his credibility.

sneak• 6 years ago

But the Tesla statement is way crazier than the rest because it's a material statement about the potential future earnings of the company.

The tweet does not say anything material about earnings past, present, or future. Your statement is a false one.

henryfjordan• 6 years ago

Rage, rage against the dying of the light of consciousness

That's an amended quote from a poem: https://poets.org/poem/do-not-go-gentle-good-night

Fun Fact: the poem was featured heavily in the movie Interstellar.

aaaxyz• 6 years ago

Does anyone still take anything he says seriously?

clouddrover2• 6 years ago

Yes. He has many ardent followers who take what he says to heart.

giarc• 6 years ago

Yes, he's been spouting off about the deaths from COVID being artificially inflated and I see a ton of people starting to agree with him.

dwaltrip• 6 years ago

Despite occasionally saying crazy or downright offensive things, his company was the first to ever land a orbital rocket booster, which is an incredible feat that is hard to understate. And it looks like they may be the first to build a fully reusable rocket, which could change humanity's relationship with space forever. And he also runs the first new automobile company to successfully establish itself in many decades.

Clearly, like most absolutist positions (cue "only a sith..." quote), disregarding everything he says would be foolish.

joshstrange• 6 years ago

"We view these Musk comments as tongue in cheek and it's Elon being Elon. It's certainly a headache for investors for him to venture into this area as his tweeting remains a hot button issue and [Wall] Street clearly is frustrated,"

I'm sorry, whose fault is it that Wall Street react to tweets? I mean really, If I'm long on Tesla (I'm not, I own none of their stock unless it's somehow tied up in my 401K) am I selling all my stock because Elon said he thinks it's too high? No, that would be stupid. Sounds like day traders/HFT's are the ones that choose to react to this stuff and then get burned and I have zero compassion for that. Live by the sword...

arcticbull• 6 years ago

That's a totally fair point. Seriously, how many TSLA investors don't know who Elon is, how he acts, or his ongoing settlement with the SEC over tweeting?

jariel4• 6 years ago

It has nothing to do with Wall Street or Tweets.

It has to do with insiders and public information regarding a publicly-traded company worth many billions of dollars.

Musk has an agreement with said investors and is bound by a bunch of rules he has agreed to.

He's a fool and it could really hurt him someday.

He really needs to stop tweeting about the stock.

gowld• 6 years ago

Elon Musk is the CEO of a publicly traded company, with all the rights and responsibilities that entails. He can take the company private and delist the company if he doesn't want to follow the rules of the stock market.

Koch Industries, for example, is privately held.

daxorid• 6 years ago

whose fault is it that Wall Street react to tweets?

He's not permitted to tweet anything that may materially impact the stock without prior board or general counsel approval, per his contempt agreement.

Obviously Jay Clayton is going to let him get away with it just like his prior violation of the Consent Decree, but for the brief period of time that the market forgets the SEC is toothless when it comes to Musk, this is nominally a big deal.

xoa2• 6 years ago

He's not permitted to tweet anything that may materially impact the stock without prior board or general counsel approval, per his contempt agreement.

Isn't the actual SEC agreement a lot more specific than that? This first article [1] I found in a quick search from last year has a specific list, he has to have it cleared for including any of:

• any information about the company’s financial condition or guidance, potential or proposed mergers, acquisitions or joint ventures,

• production numbers or sales or delivery number (actual, forecasted, or projected),

• new or proposed business lines that are unrelated to then-existing business lines (presently includes vehicles, transportation, and sustainable energy products);

• projection, forecast, or estimate numbers regarding Tesla’s business that have not been previously published in official company guidance

• events regarding the company’s securities (including Musk’s acquisition or disposition of shares)

• nonpublic legal or regulatory findings or decisions;

• any event requiring the filing of a Form 8-K such as a change in control or a change in the company’s directors; any principal executive officer, president, principal financial officer, principal accounting officer, principal operating officer, or any person performing similar functions

Were there other more general terms? If not, does pure opinion of "lol it's up too high" actually violate the letter of any of those? I guess it could be argued that maybe he's saying that due to information he knows that other people don't, but it's not itself disclosing anything at all.

May get an investigation, but if internally there has been nothing of material impact (and he didn't benefit in any way) and it's just Elon Musk going off I'm not sure it's a matter for the SEC vs the board and shareholders. But his genius/drive and crazy/lack of control are pretty well known quantities at this point and tied together. If he's not violating any actual laws and a majority of shareholders are fine taking the bad with the good vs other mixtures of bad and good (safe and conservative but low vision for example) that seems like it'd be up to them?

----

1: https://techcrunch.com/2019/04/26/elon-musk-sec-agree-to-gui...

social_quotient• 6 years ago

Suppose a stop loss or trailing stop would have exited your position.

128 ETFs have Tesla in them and 55 have it as a top 15% position. Those ETFs likely have rules based on the sort of drop we saw today.

It’s easy to speak personally about not being an active trader but a careless tweets like this have consequences and can hurt people. The only argument to be made is that Elon doesn’t understand the effects of a tweet like this but I think we all know he’s a pretty smart guy.

remarkEon• 6 years ago

Oh I'm sure he absolutely understands the effects of a tweet like that, but I don't think he cares. Said differently, perhaps this is his way of pointing out the absurdity of Wall Street and all the financial engineering that goes on there.

Or maybe he wants to sell the company and thinks it needed to drop X% before a buyer would emerge.

tenpies• 6 years ago

The other part of that equation is that if I'm a fund manager, I have a fiduciary duty to my clients. Tesla has had a ton of red flags this week:

* General counsel quit

* Board no longer has insurance, Musk is "insuring" with . . . Tesla shares

* The Q1 financials are extremely suspicious

* Musk's meltdown during the ER call

* Musk's actions in the NASA conference

* Musk's meltdown on Twitter

* Musk's meltdown basically guaranteeing another SEC investigation

As a professional, you really have to check if it's in your client's best interests to continue to be exposed to this.

jrockway• 6 years ago

tweets like this have consequences and can hurt people

Sometimes I wonder if this is just an attention-seeking thing. People feel lonely, and then they say dramatic things to get attention. "Tesla is overvalued" -> stock tanks -> "hey people notice that I exist".

I have a lot of friends that I met playing games and this is a super common tactic. Instead of messaging me with "hey, want to play?" I get "i'm thinking about killing myself". The end result is the same, we play the game. I personally find it more enjoyable to play as a fun way to kill some free time, but they must get better results when their friends think they're distracting them from a suicide attempt. So they use what works.

I have to think that Elon Musk is up to something similar. I wonder if he has a therapist. It could help.

huonpine• 6 years ago

Twitter is a simulation of our world created by users content, the accuracy of the simulation with relevance to our own world is extremely debatable and should be treated thusly.

lend000• 6 years ago

If anything, the market is pricing in the risk that Elon Musk will be removed as CEO by the SEC for another potential violation of public securities laws.

crazygringo4• 6 years ago

am I selling all my stock because Elon said he thinks it's too high? No, that would be stupid.

Literally nobody knows more about what's happening at Tesla than Elon Musk does. If he thinks it's too high, that's incredibly material information.

It's entirely rational to think it's equivalent to "I saw the non-public reports of sales projections and turns out they're plummeting" or something similar.

And therefore that Tesla is overvalued and you ought to sell, and buy back again only when it's at a price that takes that into account.

It's Wall Street's job to react to all publicly available information at the moment it becomes available. Statements by a CEO are very much included in that.

What the heck do day traders or swords have to do with it? Stock prices are determined mainly by large funds, like the ones that invest people's pensions.

edoceo• 6 years ago

Or sell way OTM puts and hope they expire worthless

LeifCarrotson• 6 years ago

Sure, use whatever material information you like to decide your estimate of what you think the company is worth.

But if one tweet is worth 1/9th as much as all the other public information you've used to arrive at that estimate, then I don't have a whole lot of faith in your number.

deadbunny• 6 years ago

To be fair TSLA is insanely priced, it was overpriced at ~250 and has only grown exuberantly this year.

DSingularity• 6 years ago

Really? You don’t think the words of the CEO of Tesla matter?

mandeepj• 6 years ago

Elon said he thinks it's too high

He also said it's too high when the stock was around 200

zozbot2342• 6 years ago

Discussed earlier https://news.ycombinator.com/item?id=23043771

Barrin92• 6 years ago

The Deus Ex profile pic is appropriate because I'm increasingly unsure if Elon Musk isn't doing some kind of decade long performance art piece as a real-world Bob Page.

dogma11382• 6 years ago

At least he got rid of the anime profile pic.

starpilot• 6 years ago

Why contain it?

crazygringo4• 6 years ago

Wait... ...again?!?!

After his SEC agreement expressly requires him to have his tweets vetted first, and he didn't?

What is the man thinking. He's not an idiot. Is he self-destructing? Does he have the impulse control of a 5-year-old?

He's going to lose his position on the board, for real.

And he deserves to at this point.

When you run a publicly traded corporation, there are rigorous rules about what you can and cannot say, and when, to ensure a fair playing field for investors. The same way there are rigorous rules against insider trading.

If he wants to act irresponsibly, then he should have kept Tesla a private company.

Seriously. The guy is simply not exhibiting the mental self-control to run a publicly traded corporation. It's becoming clear he simply can't do the job as is required, no matter how smart he may otherwise be.

jlengrand2• 6 years ago

What is the man thinking. He's not an idiot. Is he self-destructing? Does he have the impulse control of a 5-year-old?

He's going to lose his position on the board, for real.

-> You mean, like the man that runs the country he lives in ? :)

osrec7• 6 years ago

Had you mentioned the man that "runs" your country by name, I assure you, you would have been downvoted.

Almost as if bots are monitoring this forum, and downvoting anything negative about their overlord.

I dare you to try!

aaomidi4• 6 years ago

Lol if only SEC actually had any way of having strong enforcement.

I love how white collar crimes which involve stealing money get punished by.....requiring them to pay money.

Someone can probably minmax the right amount to steal to make sure they make a profit at the end of it all.

Gibbon13• 6 years ago

I love how people that commit white collar crimes pay fines using stockholders money. Which seems like embezzlement to me.

geoelectric2• 6 years ago

At this point, I'm fairly sure he either has a cyclic mental illness causing him to be reckless in waves; is incredibly sleep-deprived to the point of executive function broadly going sideways; or has a serious problem with tweeting (and apparently earnings calls) while on stuff.

It's possibly all three.

Whatever the case, it resembles a lot what my ADHD did when it was completely unmanaged and at peak. But I didn't have a few billion dollars to make people have to put up with me. It definitely smells like impulse control/executive function in some way or the other.

s53002• 6 years ago

It's his life. Why do you want it to be controlled to your ideals?

kire2345• 6 years ago

M guess it is it somewhat related to his girlfriend Grimes is expecting a Baby on Monday. He also tweeted that shes mad at him. Together with the whole covid situation is likely a bit too much stress.

DougN7• 6 years ago

I’m betting (sadly) we’re watching the development of this generation’s Howard Hughs

KorematsuFred• 6 years ago

He's going to lose his position on the board, for real.

I bet he won't.

there are rigorous rules about what you can and cannot say, and when, to ensure a fair playing field for investors.

Many of such rules when applied would have put half the wall street in jail after 2008. Instead they got bailouts. Many things that Trump has done would have got presidents impeached 50 years ago.

jdxcode• 6 years ago

nobody cared when the zoom ceo said the same thing https://www.bloomberg.com/news/articles/2019-04-18/zoom-vide...

loceng4• 6 years ago

The "imo" he added at the end clarifies it's his personal opinion.

The market deserves this for being so irrational; the people who sold probably all made profit because they bought it far lower, and then it'll bounce back up - where the long-gamers will repurchase it at a discount taking a risk/gamble that they'd expect irrational dump of stock for the opportunity to buy when it's low.

Stock market games aren't as obvious as people make them out to be - and they wouldn't be happening if Elon wasn't convinced by someone to not take Tesla private like he wanted to.

ljw10013• 6 years ago

CEOs of publicly traded companies aren't allowed to express "personal" opinions in public. If they do, they're not personal; they're guidance.

medion• 6 years ago

Serious question, but why doesn't the same apply for Trump? Why is he allowed to tweet any old crazy thing but Elon isn't?

krapp• 6 years ago

It absolutely should apply for Trump.

But Trump already had a public history of crazy tweets (global warming is a Chinese hoax) and statements (grab them by the pussy) and he got elected anyway, so I guess the bar for sanity and impulse control is higher for a CEO in the eyes of the American public than for a President.

Or maybe not, since it doesn't seem like either has actually suffered any material, significant consequences for their actions.

afiori4• 6 years ago

For the same reasons elected officials are not bound to electoral promises. There are procedures to remove people from offices and rules to limit their power, but elected officials should be able to act in their best judgment in those bounds, as in no "court" should be able to force a politician to pass/vote for a law.

s53002• 6 years ago

Looks like somebody beat me to the point... But - a US citizen loses their freedom of speech when they run a publicly traded corp? What do you have to say about the president then...

afiori4• 6 years ago

The concept of publicly traded companies is multifaceted. In this case the relevant part would be that when you accept the role of a CEO (which I believe Musk is) you take on various levels of liability on part of the investors.

Specifically if a CEO decides to just destroy a company then investor can personally sue him or her.

Overall from what I see the concept of free speech is being misused so much it becomes quite difficult to understand which variant people are referring to.

jonny_eh• 6 years ago

You lose your freedom of speech when you willingly sign it away in exchange for power and responsibility.

ljw10013• 6 years ago

He's corporate America's Donald Trump.

perardi• 6 years ago

Given the little slap on the wrist from the SEC for his “we’re going private at $420, man, yeah, funding secured” outburst, he will face no repercussions for this, and this’ll all be forgotten.

cryptica• 6 years ago

Maybe Elon is regularly scaring speculators away from Tesla stock so that only strong believers remain. Strong stock holders allow higher P/E ratios.

mcbrit4• 6 years ago

The environment is unimaginably stressful. Close your eyes for a moment, and imagine the voices.

It's possible tomorrow that he wakes up, and gets on with it. It being: well, he's pretty much defined what it is over the past 10+ years. It's humbling and exciting. He is the best of us. I hope that happens.

aaomidi4• 6 years ago

What

mcbrit4• 6 years ago

Really. No traps here. Close your eyes, imagine the voices. But fame, so really /loud/ voices.

thebruce87m• 6 years ago

If Elon “Pedo Guy” Musk is the best of us then that’s pretty depressing.

mcbrit4• 6 years ago

Sure. But you've got to score folks some way or another; and one way that sounds fair is if your value system results in humans landing on the moon.

If you critique everyone that way, then you've got at least two very opposed value systems to talk about today.

LeoNatan25• 6 years ago

I was hopping this followed his retarded "FREE AMERICA NOW" tweet, but of course, how naive of me.

archibaldJ2• 6 years ago

It makes more sense if this is viewed as Musk's way of manipulating the mainstream media into paying attention to his reopening stance and in the process change public opinion about the reopening perhaps. Losing some stock valuation with possible SEC fine is a small price to pay if the states do get reopened sooner and people are happily back to work again and the economy at least somewhat goes back to normal.

He can tweet as if he has gone mad or something. In one way or another it's all a facade. I would buy more into this possibility than that he is unaware of the consequences of his tweets or is actually in some sort of mentally unstable state right now. All look very theatrical for me.

The "my girlfriend is mad at me" part actually made me snicker a little. I think that is something many people can relate to. Also, there appears to be more americans joining the reopen camp as the whole debate shifts to freedom vs authoritarian.

Or you can also argue that he is being irrational in a rational way.

zozbot2342• 6 years ago

Perhaps. Or maybe he's just having his covfefe moment. I mean, it could happen to anyone. Twitter is weird like that.

esoterica• 6 years ago

I don’t think acting like a crazy person screaming on the street corner is the best way to persuade people that your ideas are smart and rational. It’s not like he needs to draw attention to the cause, there is literally no other issue besides virus occupying the public imagination right now. You seem very desperate to find any excuse, no matter how preposterous, to justify Musk’s behavior. Why is that the case?

archibaldJ2• 6 years ago

It is to evoke empathy.

kalium-xyz• 6 years ago

Is this this what mainstream appeal is now?

notastudent• 6 years ago

Wow, everybody here seems to talk about first amendment, stock price and whatnot, completely ignoring the content of his statement. Hes a billionaire who wants his workers to get back to work, irrespective of their health. Dafuq. HN is such a boot licking community sometimes.

Go ahead, downvote me

Elon Musk tweet wipes $14bn off Tesla's value

Related Stories