Musk’s credibility goes from bad to worse

DETROIT — First it was the shocking tweet that funding was secured and Tesla may go private, then a statement that the money wasn’t locked down after all. Two weeks later it’s never mind, the whole deal is off.

Welcome to the disarray of Elon Musk, the impulsive genius and architect of cutting-edge car, rocket and solar panel companies built nearly from scratch.

Chaos, though, comes with a price. Experts say it all could wind up with Tesla exposed to a fine for misleading investors. And even though Musk has almost legendary status, the episode could further erode his credibility with stakeholders who have endured multiple broken promises and years of losses as a public company.

“Prior to the go-private episode, his credibility was in question, although investors still had overall confidence in the guy,” Erik Gordon, a business and law professor at the University of Michigan, said Saturday. “This whole go-private episode has taken his credibility close to zero.”

The bizarre story began Aug. 7 when Musk, while driving to the airport, tweeted he was considering taking the company private and that funding had been secured for the deal. Investors would be paid $420 per share, a 23 percent premium over the Aug. 6 closing price. No other details were given, but Tesla’s stock shot up 11 percent that day. At $420, buying all Tesla shares would cost around $72 billion.