American entrepreneur Elon Musk tweeted on Friday that the stock value of his tech company Tesla was too high, according to him. Within minutes, Tesla's shares lost nearly 10 percent on the stock exchange, going from more than $ 760 each to less than $ 690: a capitalization loss – that is, the total value of the shares – of about 14 billion. overall, and approximately 3 billion as regards Musk's share alone.
Tesla stock price is too high imo
– Elon Musk (@elonmusk) May 1, 2020
Musk is known for his controversial and seemingly impulsive tweets, which in the past had already created huge consequences for society. In 2018, he cryptically announced on Twitter that Tesla would be withdrawing from the stock market, which did not happen. The SEC, the US stock exchange control agency, had therefore requested that its tweets with sensitive information from then on would have to be approved by an outside commission. The Wall Street Journal emailed Musk if he was joking in the tweet and had it checked before publishing it: “No,” Musk replied laconically.
The case of the latest tweet about Tesla's too-high-value stock was actually different: because Musk made an admission ostensibly against his own interests. John Coffee, a law professor at Columbia University, told CNN that Musk is likely not going to get into trouble because he expressed a personal opinion without disclosing confidential information. According to Coffee, then, he did one thing that should be encouraged in CEOs: he admitted that the value of his company's shares seemed too high.
For some time, economic analysts have been debating the value of Tesla's shares, which in January had exceeded $ 100 billion in capitalization for the first time, surpassing Volkswagen and becoming the second largest car company in the world in value after Toyota. But despite its stock market value, Tesla is a tiny company when compared to the other major companies: in 2019, for example, it sold 368,000 cars, about 30 times less than Volkswagen.
For years, therefore, some financial analysts have argued that behind Tesla there is a financial bubble, fueled by confidence in the future of electric cars and also in the capabilities of Elon Musk. Despite frequent predictions of its collapse, however, Tesla has continued to grow and perform well, despite occasional falls in value and troubles with manufacturing. And the numerous embarrassing incidents that happened to Musk, which would have been fatal to many other CEOs, were quickly forgotten: many continue to have great faith in his company.
After the tweet about the shares, Musk made other strange and discussed ones: first he again asked to “liberate America”, as he has been doing for days by joining the protests against the restrictions for the coronavirus in the United States. He then said that he will sell all of his assets and that he will no longer own a house, later adding that the tweet angered his girlfriend, singer Grimes.
