Musk Twitter rant tanks Tesla stock

Elon Musk’s anti-lockdown rants this week took a bizarre turn on Friday after the storied tech founder’s Twitter account declared that shares of Tesla Inc are overvalued – prompting investors to punish the electronic car maker by sending its shares down more than 10 percent. 

The string of tweets appeared to start with a declaration: “I am selling almost all physical possessions. Will own no house.”  Followed by: “Tesla stock is too high imo”. A third tweet channelled Musk’s now well-known opposition to coronavirus lockdowns: “Now give people back their FREEDOM” followed by a string of tweets pulling lines from the United States national anthem, the Star-Spangled Banner. 

More than two hours after the tweets began, Tesla had not responded to requests for comment. Twitter declined to comment. The Wall Street Journal reported that Musk had responded to an email asking whether he was joking or whether his tweet was vetted by saying, “no”.

It is also unclear whether his tweet about Tesla stock price could land Musk in hot water with the US Securities and Exchange Commission (SEC). 

In August 2018, Musk tweeted that he had secured funding to possibly take Tesla private at a big premium, which led a fraud case by the SEC. Musk settled by agreeing to pay $20m and have a Tesla lawyer pre-screen tweets with important information about the company.

Last month, a federal judge said Tesla and Musk must face a lawsuit by shareholders over the going-private tweet, including a claim that Musk intended to defraud them.

In April 2019 Musk tweeted, “My Twitter is pretty much complete nonsense at this point.”

“We view these Musk comments as tongue in cheek and it’s Elon being Elon. It’s certainty a headache for investors for him to venture into this area as his tweeting remains a hot button issue and the Street clearly is frustrated,” Wedbush Securities analyst Daniel Ives said by email.

Tesla’s stock has surged in recent weeks, but is down since Wednesday after the company reported an unexpected quarterly profit, despite manufacturing interruptions caused by the coronavirus pandemic.

Musk’s latest tweets follow others this week. On Tesla’s quarterly conference call on Wednesday, he called sweeping US stay-at-home restrictions to curtail the coronavirus outbreak “fascist”. Those restrictions have forced Tesla to shutter its car plant in Fremont, California.

“Musk has recently expressed some strong and, at times, controversial, views on COVID-19 and some elements of the response to the crisis and we believe is attempting to use his broad following and visibility to bring attention to some economic factors that he believes may be overlooked,” Morgan Stanley analyst Adam Jonas wrote in a client note on Friday.

Musk’s iconoclastic stance has helped him attract over 33 million followers on Twitter, and is seen as a marketing boon for Tesla.

Tesla’s recent rally has put Musk on the verge of a payday of over $700m. The six-month average of Tesla’s market capitalisation is just short of $100bn – a target that would trigger the vesting of a tranche of options granted to Musk to buy 1.69 million shares as part of his two-year-old pay package.