Just Another Billion-Dollar Elon Musk Tweet
(Bloomberg Opinion) -- “Elon Musk tweeted something” really ought not to be how a piece about Tesla Inc. starts. But that’s what happened late on Thursday afternoon, and it matters. Here it is:
Grammatical mishap aside, this is what some might call a “sick burn,” one supposes. Just four minutes later, it would have gone out at the mystical time of 4:20 on the East Coast, and this column would probably have to be a thousand words longer, at least. As it is, and unlike the “funding secured” bombshell, the Tesla CEO did at least wait until the market was closed.
The value of his company dropped about $1.1 billion after the close anyway. As well it might. Because, while this isn’t the first tweet of questionable wisdom issued by Musk (see “pedo guy,” for example), he really picked his target this time (assuming his account wasn’t hacked).
While it’s obviously getting hard to keep up, you may recall Musk just settled with the Securities and Exchange Commission, which was suing him for misleading shareholders with that whole funding-secured thing. In its complaint, the SEC documented Musk’s extensive complaints about short sellers having it in for Tesla. Having first called the SEC’s action unjustified, Musk quickly settled for a $20 million fine and giving up the chairmanship for three years, while retaining the position of CEO (the stock had dropped 14 percent in the intervening day or so). Tesla, meanwhile, was supposed to add new independent directors and implement controls overseeing Musk’s communications.
So now … Musk decided to … make a joke … about the SEC ... enabling the short sellers … on Twitter.
I’ve no idea what the SEC’s sense of humor is like. But the regulators had been criticized already for letting Musk off relatively lightly. So openly mocking them seems a somewhat bold move. Especially as the settlement must yet be justified to a district judge in order for it be approved.
Guessing whether another tweet could really blow up this settlement would just be that: guessing. Either way, Tesla’s shareholders just got another reminder of the vacuum of governance at this company.
Only on Wednesday, there was speculation about who would replace Musk as chairman, with existing director James Murdoch’s name being thrown around. Given everything that’s happened this year with Murdoch already on the board, though, it’s unclear why his elevation would make much difference.
At a minimum, Tesla needs someone from outside, not least because they would conduct an audit of the company’s operations, governance and finances for themselves. Of course, with the CEO seemingly still willing to take big risks for the retweets, it’ll be a brave soul that even considers the job.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.
©2018 Bloomberg L.P.