Elon Musk is a famous entrepreneur and the Chief Executive Officer of Tesla. He is idolized by many for being a visionary and creating companies that have become unicorns. His words are imbibed by everyone in the technology and business world. His business acumen and technological know-how are well-respected throughout the world. He uses his twitter handle liberally to express his views and opinions. However, that does not always bode well for him and his company Tesla. The latest Elon Musk Tweet seems to have landed him in a soup. The logic and timing behind his tweets are seldom not understood.
The Elon Musk Tweet
Elon Musk used his personal handle to put a tweet on the first of May. This tweet read ‘Tesla stock price is too high imo’, where imo stands for in my opinion.
Tesla stock price is too high imo
— Elon Musk (@elonmusk) May 1, 2020
While his opinion is well-respected across the world, it doesn’t seem to be doing wonders for him. A simple tweet that must have taken him barely a minute to put out is going to have severe repercussions. The Elon Musk Tweet has created a buzz because his opinion is respected and it affects the world. Tesla is the world’s largest electric car manufacturer and it caters to a lot of premium demand. Being the Chief Executive Officer of Tesla, his words affect not just him but also the company and its stock.
His tweet has had a severe impact on Tesla’s stock valuation which sent ripples across the stock market. In a matter of hours, $14 billion worth of market value was wiped off from Tesla’s valuation. Elon Musk himself too lost $3 Billion from his own stake in Tesla. Thus, a single tweet from him led to Billion-dollar losses for him and his company. Tesla’s board and US Securities Exchange Commission (SEC) have taken cognizance of this fact. Obviously, none of them is pleased with this action. In fact, Elon Musk may be forced to vacate his position as the Chief Executive Officer of Tesla.
Just a small tweet from him can have such a huge impact on the company and the economy. This is not the first time that one of his tweets have led to huge repercussions for him and his company. In August 2018 Elon Musk tweeted ‘Going private, funding secured’ at $420 per share. This tweet cost him his role as the chairman of Tesla and SEC initiated fraud charges. However, Elon Musk, Tesla and the SEC reached a settlement against the fraud charges. $40 million was paid as penalty which was split equally between Elon Musk and Tesla.
The newest Elon Musk Tweet has surely sent the world in a tizzy. Since the country is reeling from the economic impact of COVID-19, investor confidence is as it is jittery. Stock markets the world over are taking a plunge which has led to heavy losses for the investors. When good stocks like Tesla take a plunge that too because of a tweet, there are bound to be repercussions. It remains to be seen what action Tesla’s board and the SEC will take.