Elon Musk Says Tesla Share Price Is Too High


Tesla’s chief executive, Elon Musk, said on Twitter on Friday that the company’s stock price, which had been surging in recent weeks, was “too high” in his opinion. The stock fell sharply after the post, and closed 10.3 percent down.

Always volatile, the price of the company’s shares had been rising steadily since mid-March in part because investors believe Tesla is poised to lead a transition to electric cars. The shares are worth more than the combined value of General Motors, Ford Motor and Fiat Chrysler, which make millions of cars a year, compared with the hundreds of thousands that Tesla produces.

This week, Tesla announced that it had earned a small profit for the third straight quarter. The company, founded in 2003, has never been profitable over a full year.

Mr. Musk’s comment, delivered amid a stream of unusual posts, might strike some as odd considering he has long railed against short sellers who have targeted Tesla’s stock because they believe it is overvalued.

Recently, he has also fumed over government efforts to contain the spread of the coronavirus. During the company’s conference call with analysts this week to discuss its first-quarter results, Mr. Musk, who has attracted devoted fans and critics, lashed out at stay-at-home orders that have closed Tesla’s Fremont, Calif., car factory, calling them “fascist.”

“They’re breaking people’s freedoms in ways that are wrong and are not why people came here or built this country,” he said on the call, adding an expletive.

Tesla shut down production at the factory last month after initially resisting a local shelter-at-home order. The company told some employees to prepare to return this week but reversed course. Mr. Musk told analysts that it was not clear when the company would be able to restart production there.

Mr. Musk, who is also the chief executive of SpaceX, also said on Friday that he was “selling almost all physical possessions” and would no longer own a home, explaining that he didn’t need cash because he was “devoting” himself to Mars and Earth. He also posted lines from the national anthem; wrote, “Now give people back their FREEDOM”; quoted the poet Dylan Thomas; and said his baby with the singer and songwriter Claire Boucher, better known as Grimes, is due Monday. The messages were not unusual for Mr. Musk, who often writes messages on Twitter in emotional bursts.

In 2018, Mr. Musk reached a settlement with the Securities and Exchange Commission in which he agreed to step down as Tesla’s chairman, and to have a lawyer approve any written statement he made about the company that might contain material information. Mr. Musk had said on Twitter that he had “funding secured” to take Tesla private at $420 a share. It turned out that the plan was in a much more embryonic state than his tweet indicated.

In April 2019, Mr. Musk and the S.E.C. amended that agreement after the securities regulator sought to hold him in contempt of court for talking about Tesla’s production forecast on Twitter without having a lawyer sign off on the post. The new agreement included a list of things the chief executive was not to speak about without approval, including the electric-car company’s financial condition, earnings forecast, proposed acquisitions and production data.

Marc Leaf, a partner at Faegre Drinker Biddle & Reath in New York, who has previously worked at the S.E.C., said Mr. Musk’s Twitter post on Friday did not appear to be forbidden but could worry the company’s board.

“Mr. Musk’s tweet is a matter for Tesla’s board of directors, not enforcement personnel,” Mr. Leaf said. “At this point, he’s going to say what he’s going to say. He didn’t violate the law as far as I can tell, but if I were a director, I’d have some concerns about my C.E.O. and founder saying this.”

The company revealed in a regulatory filing this week that it had taken the unusual step of dropping an insurance policy that protected its board members from lawsuits, a standard feature at publicly traded companies, because the rates were too high. Instead, Mr. Musk agreed to personally provide coverage to the board for one year.

The board, which includes Mr. Musk’s brother and several longstanding business associates and friends of the chief executive, determined that the arrangement would not threaten its independence since the coverage is governed by a binding agreement with Tesla.

Tesla did not immediately respond to a request for comment.

Peter Eavis and Neal E. Boudette contributed reporting.





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