Elon Musk, Tesla CEO and top billionaire is known to be in trouble for his and his business on his Twitter account. But with Musk’s salary as CEO linked to Tesla’s stock performance, you would think that he would have good reasons to keep his opinion on Tesla’s “too high” price for himself – but, as recent events prove, you are mistaken.
Dumb Tweet From Elon Musk Probably Cost Him A $750 Million Bonus
Musk used his official Twitter account (where all of his business-related tweets are supposed to be reviewed before they are posted) to tweet the following short, sweet missive about his view of Tesla’s current market value:
Tesla share price is too high imo
– Elon Musk (@elonmusk) May 1, 2020
When he did, Tesla was sitting at $ 760 per share, and almost immediately it fell to less than $ 700. After a slight rebound, the title had lost about 8%, a fairly clear response to a six-word tweet that ends with “imo”.
This could be due to the fact that the tweet was one of several strange ones posted by Musk this morning, including an announcement that he intended to sell “almost all of my physical property”, including his house – so it’s possible that investors respond to erratic tweets in general and not just his price statement.
In any case, the tweets almost certainly delayed huge Tesla stock pay Musk is about to guarantee, once Tesla’s six-month average market value exceeds $ 100 billion. They certainly did not help, dropping Tesla’s market value by almost $ 14 billion almost instantly.
Columbia University professor of corporate law John Coffee told CNN that Musk likely would not see any other serious consequences from his tweets, as his view of Tesla’s share price was (explicitly) a matter of his personal opinion, and could be considered as an example of honesty rare in the business world:
“In addition, it is very rare for a CEO to admit that his share price is too high, and such evaluations should be encouraged, not punished.”
Musk expressed a similar sentiment at a corporate event in 2013, claiming Tesla’s action was worth “more than we have the right to deserve”, and in December 2019, he made a strangely similar tweet at his most recent: “Whoa … the action is so high lol.”