When it comes to Twitter, Tesla CEO Elon Musk is one of many who keeps messing up.
We’ve all done it. Tweeted something that didn’t make sense, and only after we hit the enter key did we have our “dang it” moment.
While laypersons may not face much fallout from such screw-ups, people like Elon Musk can draw immediate ire, condemnation, and trigger haters to point out all flaws. Musk’s latest Twitter gaffe came Wednesday afternoon when the tech tycoon had to issue a follow-up tweet stating, “I meant to say…”
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Musk’s situation is particularly precarious. Tesla is under the watchful eye of the SEC over his social media outbursts.
Musk’s Tweet Brings Out the Wrath
He tweeted Tuesday:
Tesla made 0 cars in 2011, but will make around 500k in 2019
— Elon Musk (@elonmusk) February 20, 2019
A few hours later, he tried to correct that tweet via another tweet:
Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k.
— Elon Musk (@elonmusk) February 20, 2019
Too Litte, Too Late
Musk’s followup tweet was too late. His Twitter feed exploded, and observers said this latest tweet fiasco was part of a larger problem. For example, Barron’s was brutally honest, saying:
Musk Tuesday night made a series of tweets, one of them potentially readable as updating the company’s production outlook for 2019. A few hours later, he clarified that, bringing it more in line with past company statements. (As is often the case with tweets generally, the earlier tweet was shared far more widely than the clarification.)
Barron’s questioned whether Tesla was complying with the terms of a 2018 settlement with the U.S. Securities and Exchange Commission related to taking the company private. The SEC found that Tesla didn’t have the “required disclosure controls and procedures relating to Musk’s tweets.
Now it’s being wondered if that system is in place to monitor Musk’s social media posts, and/or if it’s being used.
According to the SEC’s complaint against him, Musk tweeted on August 7, 2018 that he could take Tesla private at $420 per share — a substantial premium to its trading price at the time — that funding for the transaction had been secured, and that the only remaining uncertainty was a shareholder vote.
The SEC found Musk’s “misleading tweets” had caused Tesla’s stock price to jump by more than 6% on that date. When Musk discussed this with “60 Minutes” in December, he said:
The only tweets that would have to be, say, ‘reviewed’ would be if a tweet had a probability of causing a movement in the stock [price]. Otherwise, it’s, ‘hello, first amendment.’ Like, freedom of speech is fundamental.
What Musk Really Meant, We Think
The big difference between the tweets about Tesla’s production numbers relates to its production rate. Again, he originally tweeted that the company that Tesla would produce roughly 500,000 vehicles this year.
Leaving out the words “annualized production rate” was the problem for many. Interestingly, Tesla was recently praised for providing investors clarity on its production plans. RBC Capital analyst Joseph Spak said:
It’s not that we don’t believe Tesla can grow over time, our model shows solid LT growth. But the current valuation already considers overly lofty expectations.
The news about the tweet drowned out other positive news about Tesla. For example, during a recent interview, Musk revealed that Tesla expects its driverless car technology to be fully ready before the end of 2019, CCN reported.
I think we will be feature complete — full self-driving — this year. Meaning the car will be able to find you in a parking lot, pick you up and take you all the way to your destination without an intervention, this year. I would say I am of certain of that. That is not a question mark.
Musk Must Be Careful With Production Comments
Musk also refrain from making comments about its production because of the Justice Department. In an SEC quarterly filing last year, Tesla said it had received a subpoena over its Model 3 production rates and other public statements relating to Model 3 production.
On Tuesday, Tesla submitted a 10-K filing to the SEC. It stated it is cooperating in “certain government investigations.” It stated:
To our knowledge, no government agency in any ongoing investigation has concluded that any wrongdoing occurred.