What can stop a stock market rally in tracks? An Elon Musk tweet, that’s what.
Shares of the electric vehicle maker soared since car rental giant Hertz announced just over a week ago that it plans to buy 100,000 Teslas for its fleet.
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The powerful rally was enough to drive Tesla’s market cap over the $1 trillion mark for the first time.
But Tesla shares took a tumble in early trading in New York on Tuesday after Musk tweeted late on Monday that “no contract has been signed yet” with Hertz. He also said that demand for Teslas still outstrips supply and that Hertz would not get a discount on its bulk order deal.
If any of this is based on Hertz, I’d like to emphasize that no contract has been signed yet.
Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers.
Hertz deal has zero effect on our economics.
— Elon Musk (@elonmusk) November 2, 2021
Musk’s tweet was a response to one posted by the Tesla Silicon Valley Club on Monday that featured a price chart of upward climbing Tesla shares along with the words: “Super $tsla stonks. Thank you @elonmusk”.
For its part, Hertz followed up Musk’s tweet by reiterating on Tuesday that its plan to purchase Teslas is still moving forward and that it has already received deliveries.
“As we announced last week, Hertz has made an initial order of 100,000 Tesla electric vehicles by the end of 2022 and is investing in new EV [electric vehicle] charging infrastructure across the company’s global operations,” the company said in an email statement to several news organisations including the Associated Press and Bloomberg. “Deliveries of the Teslas already have started, and consumer reaction to our commitment to lead in electrification has been beyond our expectations.”