Spaced out in cyberspace
Musk’s erratic tweets have caused swings in Tesla’s share price and ruin to his reputation. He should delete his Twitter account
Did the world’s most expensive tweet cost Elon Musk and Tesla $40m, or was it $7bn?
It depends how you look at it. Musk and Tesla were fined $20m each for his ill-considered tweet on August 7 that he planned to take the electric car company private and had “funding secured”.
But the cost to the company when the US Securities &
Exchange Commission (SEC) announced it would charge him for securities fraud and pushed for an aggressive ban against him serving as a director was a $7bn drop in share value.
By comparison the $40m is not only a bargain but a lesser penalty, requiring Musk to step down as chair but stay on as CEO.
Musk’s choice of $420 as the share price in that fateful tweet seems to have been an elaborate joke about marijuana for his girlfriend, the musician known as Grimes. In the US, 4.20pm is thought of as a good time to smoke a joint, hence the 420 meme.
He had calculated the day’s closing share price with a 20% premium, which came to $419. “Musk stated that he rounded the price up to $420 because he had recently learnt about the number’s significance in marijuana culture and thought his girlfriend would ‘find it funny’, which admittedly is not a great reason to pick a price,” the SEC states.
That’s a $20m bad joke — making it the most expensive misunderstood joke tweet of all time, too. The full text was: “Am considering taking Tesla private at $420. Funding secured.”
Though he apparently had discussions with the Saudi Arabia sovereign wealth fund, which had invested $2bn in the company, they did not amount to a deal.
“Musk knew or was reckless in not knowing that each of these statements was false and/or misleading because he did not have an adequate basis in fact for his assertions,” the SEC wrote.
It’s the latest instalment of a very public meltdown by the Saborn entrepreneur that has investors baffled and is a good argument for why high-profile business people should not use Twitter. Part of the SEC settlement is that a lawyer will monitor Musk’s tweets.
It’s not the only highly publicised lawsuit in which Musk is involved — he is being sued by British cave explorer Vernon Unsworth, who Musk infamously called “pedo guy”, or paedophile, in a tweet.
Unsworth was the lead diver in the dramatic rescue of 12 young Thai footballers who were trapped with their coach in flooded caves.
The spat involved a mini-submarine Musk made at Spacex for the rescue that wasn’t used. “You know what, don’t bother showing the video,” Musk tweeted of the video he posted. “We will make one of the mini-sub/pod going all the way to Cave 5 no problemo. Sorry pedo guy, you really did ask for it.” He has since apologised but not without doing both men’s reputations damage.