Elon Musk on Twitter is like a kid that keeps playing with firecrackers: analyst
PALO ALTO, CALIFORNIA - Elon Musk is at it again on Twitter... Tesla stock spiralled in Friday's trading, shedding 3.4% by market close following a flurry of news about chief executive Elon Musk's Twitter activity.
South African-born Musk boasted early on Friday to his nearly 50 million Twitter followers that his company could be "the biggest" in a few months. It came less than a day after the National Labour Review Board upheld a 2019 ruling that determined Tesla engaged in unfair labour practices and called on the company to have Musk delete a tweet from 2018.
At 4:18am on Friday, Musk tweeted, "I think there is a >0% chance Tesla could become the biggest company," in response to Twitter user who stated that the electric car manufacturer could be bigger than Apple and tagged Musk.
Another user responded, "I love the direction of that arrow!" To which Musk replied: "Probably within a few months."
That tweet has since been deleted, but screenshots from multiple users who posted Musk's tweets showed the early-morning declarations.
Tesla fans quickly reacted, urging other Twitter users to delete screenshots of those tweets over fears the US Securities and Exchange Commission might take notice. Others called for Tesla fans to buy more stock.
The federal regulator declined to comment. A Tesla representative did not respond to a request for comment.
Dan Ives, the managing director of equity research for Wedbush Securities, called Musk's Twitter barrages a frustration for investors, though he said he's not anticipating any action from regulators.
"Elon is Elon, and that's part of his interaction with his followers and commenting on a range of issues. But when it comes to some of these tweets, it's like a kid that keeps playing with firecrackers," he said. "Right now, investors don't want to see any noise or sideshows from Tesla and Musk. They just want to see results, deliveries, and ultimately something that would drive the stock higher."
Musk's tweets have been the subject of amusement, investor lawsuits and a securities fraud charge by the SEC.
Earlier this month, Tesla investor Chase Gharrity filed a lawsuit over Musk's "erratic" tweets that he said influenced the markets and cost shareholders billions of dollars in losses, Reuters reported. One of the tweets named in the complaint was from May, when Musk tweeted "Tesla stock price is too high imo" and Tesla stock price fell by 10%.
And Musk's latest Twitter spiel comes just one day after the National Labour Relations Board called on Tesla to have Musk delete a tweet from 2018 discouraging unionisation and rehire a former employee the company fired, upholding a 2019 administrative law judge ruling that stated the company engaged in unfair labour practices.
As of Friday afternoon, the tweet was still up. It reads: "Nothing stopping Tesla team at our car plant from voting union. Could do so tmrw if they wanted. But why pay union dues & give up stock options for nothing? Our safety record is 2X better than when plant was UAW & everybody already gets 22."
Ives pointed out Tesla's rising competition in the electric vehicle market - with carmakers General Motors, Volkswagen and Ford now jumping into production - as a reason for the company to focus on its products instead of boasting about expectations for growth.
"When the stock's moving up on a parabolic run and Musk has the golden touch, he can't do anything wrong. But it's also understanding right now the environment for EVs," he said. "It's no longer just Tesla running the show. It's a 'prove me' time, not only for Tesla but for Musk."
Tesla is expected to release its quarterly earnings in late April or early May. David Whiston, US autos equity analyst for Morningstar, said in an emailed note that investors should look at the company's performance long-term.
"I think what matters for Tesla is what does the company look like 5, 10, 20 years from now rather than what the stock does over the next few months," he said. "As for scrutiny, I'm not concerned as long as Elon behaves enough to not have the SEC ban him from being an officer in a public company."
The Washington Post