Tesla Inc. has had a rough few months, with its stock price falling to just over $250 in early April and fluctuating wildly ever since. These fluctuations are reactions to the long line of controversies created by Tesla’s eccentric CEO and ex-chairman, Elon Musk, and in particular, his Twitter account.
In late March and early April 2018, Tesla faced safety concerns with respect to its self-driving cars and its employees, after a Tesla Model X on autopilot crashed in California and a millwright was hit by a skid carrier. In May, Elon Musk got fed up of biased news coverage and announced on his Twitter account that he was “going to create a site where the public can rate the core truth of any article & track the credibility score over time of each journalist, editor & publication.” This tweet and the underlying idea led to a lot of backlash from the press and the public.
In early July, a young Thai soccer team was stuck in a cave with Thai Navy SEALs trying to rescue them. Elon Musk travelled to Thailand with a mini submarine, but was too late to help. When British diver Vern Unsworth called it “a PR stunt” and told Musk to “stick his submarine where it hurts,” Musk retaliated with a now deleted tweet calling Unsworth a “pedo guy.” This triggered an angry reaction among the media and the public, causing Tesla’s share price to drop to $290 by the end of July.
In early September, Elon Musk appeared on the Joe Rogan Experience, a podcast filmed in California, during which he spoke at length about Tesla. However, investors, the media, and the public alike went crazy over the 10 seconds when Elon Musk had a single puff of a blunt of marijuana. Tesla’s stock price fell dramatically from $280 to $263 in just one day.
Due to a low production rate and notoriously high costs, Tesla was short on funds to the point where some said the company might run out of cash by the end of 2018. Despite, or perhaps because of, investors’ pressure for Tesla to turn a profit, on August 7th, Elon Musk posted on Twitter once again. He wrote, “Am considering taking Tesla private at $420. Funding secured.” Musk had been thinking of taking Tesla private for years and assumed it would “free him from the pressures of the public markets,” according to The New York Times. By the end of August, he backtracked and assured his board of directors that Tesla would remain public. According to his blog post on August 24th, “…it’s apparent that most of Tesla’s existing shareholders believe we are better off as a public company.” Musk’s tweet and the sudden reversal of his decision to take Tesla private caused confusion and anxiety among his investors, as well as the media. Various news reports called Musk “panicky, erratic and possibly self-destructive.”
The Securities and Exchange Commission investigated Elon Musk for “misleading investors” with his tweets. They eventually came to a settlement in October with Musk paying a $20 million fine and stepping down as chairman of Tesla, Inc. for at least three years. Tesla is said to be monitoring Musk’s statements to the public about the company. However, this news sunk Tesla’s stock to its lowest price since March 2017, a staggering drop to $250 on October 8th. But the SEC was too harsh on Musk since he was only trying to forewarn his investors, not mislead them.
Tesla, Inc. and its CEO, Elon Musk, have had a volatile past few months. However, things seem to be turning around now. Tesla Model 3 sales have shot up drastically, beating its Q3 2018 target with a total of 83,500 vehicles sold, more than a 100% increase from Q2 sales. Finally, Elon Musk can rest easy—Tesla 3 production is on track and is the safest car ever, stock price seems to be rising, and his Twitter account seems to be under control. Maybe now that he is successful again, the media will stop hounding him and maybe in the future he will be given the freedom to tweet whatever is on his mind. For now though, Elon Musk’s mind is sadly being reined in.