Tesla stock drops after Elon Musk statement

  •   04/05/2020 - 12h17
  •   HARMANT Adeline

A statement by Elon Musk sent Tesla's stock price plummeting this morning. Last weekend, the boss of this group indeed tweeted that the share price was too high. Immediately, the markets reacted and the stock lost 10.3% on Wall Street after having previously lost 13%. Let us note however that the share remains in rise of 65% since the beginning of the year and that the market capitalization of the group is almost twice superior to those of its competitors like General Motors, Ford or Fiat Chrysler. Indeed, Tesla has announced plans to sell half a million vehicles this year, a record high.

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Tesla stock drops after Elon Musk statement
Image copyright: Automobile Italia - Flickr

Elon Musk's statements have had a significant impact on the market:

It should be remembered that this is not the first time that a statement by Elon Musk has provoked a strong market reaction sincein 2018 and after the market had raised the possibility of Tesla's withdrawal from the stock market, the stock had already shown extreme volatility. Eventually, in 2019, that withdrawal was abandoned after the SEC required Elon Musk to step down as chairman of the group's board of directors to do so.

Since then, Elon Musk can no longer tweet on certain subjects without the approval of the group's legal director, notably concerning the financial health of the company, future merger and acquisition operations, production and sales figures for vehicles, new car models or the buyback of Tesla's shares and financial products.

It is therefore clear that this latest tweet is a violation of this agreement with the SEC.

 

Elon Musk is making headlines with his current anti-containment tweets:

Of course, this is not the only tweet from Elon Musk that has been making headlines lately since the boss of the space company SpaceX also declared last week that he wants to sell all his physical assets and no longer want to own a house.

Two other tweet of this pattern decidedly not like the others aim this time the containment of the population in order to limit the spread of Covid-19. These tweets say in particular "Give the people their freedom now" or "Anger, anger against the death of the light of conscience".

He also expressed himself in the press on this subject last week, Wednesday, calling the containment fascist and considering that this measure asphyxiated companies. Elon Musk had indeed delayed closing its California production plant for Tesla on March 19 and was considering reopening it on May 4. The extended containment and the imposed social distancing finally frustrated his plans, which no doubt provoked his anger.

Let us note all the same that the Tesla group succeeded, in spite of the situation, to generate a net profit of 16 million dollars in the first quarter of 2020, a record over this period since the creation of the group.