Tesla CEO Elon Musk took to micro-blogging website Twitter and said that the company’s stock was overvalued which later resulted in a sharp decline in the share prices of the company.
Tesla CEO Elon Musk has wiped nearly $15 billion off the company’s valuation with one bizarre tweet. The chief of the electric car company took to micro-blogging website Twitter and said that the company’s stock was overvalued which later resulted in a sharp decline in the share prices of the company. “Tesla stock price is too high imo” (in my opinion), Elon Musk tweeted recently. The shares of the company had risen about 85 per cent in 2020 as of Thursday’s close owing to a rise in production. After Elon Musk’s tweet, the prices crashed by 10.3 per cent on Friday to close at $701.32. The company currently has a market capitalization of $129.12 billion. Analysts had also earlier praised the company as well-positioned for an expected transition to electric cars.
This isn’t the first time that Elon Musk has made a bizarre comment which sent Tesla’s share prices tumbling. Earlier in August 2018, Elon Musk had said that he had “funding secured” for a quickly-aborted campaign to take the electric car maker private. US securities regulators later charged Elon Musk with fraud. He was also penalised by $20 million, as a part of a running dispute with the Securities and Exchange Commission (SEC). Elon Musk then later agreed with the SEC on topics he should avoid on Twitter or other social media. The April 2019 deal includes statements about acquisitions, mergers, new products and production numbers, according to AFP.
In 2017 as well, Tesla CEO made similar comments and said that the company’s stocks were higher than it deserved. Tesla had a nearly $50 billion market capitalization in May 2017. After Friday’s tweet, Tesla CEO sent about dozen more tweets such as “I am selling almost all physical possessions. Will own no house”.