Musk Moves Tesla Shares With Cryptic Tweets on News to Come
(Bloomberg) -- Elon Musk’s Twitter feed giveth, and Elon Musk’s Twitter feed taketh away.
After delivering a scare to Tesla Inc. shareholders late Monday by openly tussling with the U.S. Securities and Exchange Commission over his tweeting, the chief executive officer seemed to send the stock climbing with cryptic posts about news coming at 2 p.m. California time Thursday. A company spokesman declined to elaborate.
The vague posts are the latest proof Musk, 47, can craft tweets that move Tesla shares no matter how little detail they provide. The stock rose as much as 5.8 percent on Wednesday, the biggest intraday jump in more than seven weeks, as the CEO’s followers and fans speculated on what the news could be. Guesses ranged from a new-vehicle reveal to a demonstration of the company’s self-driving capabilities.
Those who are buying Tesla shares because of the tweets may end up being disappointed, said Gene Munster, managing partner at the venture capital firm Loup Ventures.
“I believe the announcement is going to be about their debt, and may disappoint some investors who may have been expecting to get an update on the Model Y,” Munster said by phone. Tesla has a $920 million convertible bond maturing Friday that it’s likely going to have to settle with cash.
Musk recently told investors Tesla had completed the engineering and design of the Model Y, the crossover that will be smaller and cheaper than the Model X. About three quarters of the Model Y’s components will be shared with the Model 3, the company’s first mass-manufactured car. The sedan has been catalyst for Tesla’s surge in deliveries and two quarters of profit.
In May of last year, Musk tweeted that Tesla might unveil the Model Y anytime from late 2018 to mid 2019.
The CEO has also said lately that service operations will be a major priority for this quarter, and that Teslas are getting closer to being able to drive themselves. Musk may also be dropping a hint using his Twitter profile -- he’s changed his name on the social-media network to Elon Tusk and added an elephant emoji.
The SEC on Monday asked a judge to hold Musk in contempt for violating a settlement that required him to get company approval before communicating material information to investors. He breached that deal with a Feb. 19 tweet that said Tesla would make about half a million cars in 2019, the agency claims. Musk posted a few hours later that deliveries would only reach about 400,000.
The Tesla CEO has until March 11 to submit a brief to U.S. District Judge Alison Nathan on why he shouldn’t be held in contempt. No hearing date has been set.
©2019 Bloomberg L.P.