Things were looking up for Tesla a few days ago when they released their Q1 financials. The companies stock saw a modest bump as confidence grew in the company after three consecutive profitable quarters. The only thing that could possibly mess this all up is another dumb tweet from Elon Musk.

Elon is losing his mind

Elon has already been stirring up some controversy the past few days blasting shelter in place orders.

After shipping over 1000 ventilators to hospitals Elon seemed like he was taking the coronavirus seriously. But as things dragged on Elon started calling for restrictions to be lifted.

Everything exploded today, as Elon voiced his support for protestors against stay at home orders. All culminating in a series of tweets singing the national anthem.

He also vowed to sell all his worldly possessions.

And just generally started to lose his mind.

The illegal part

Then Elon dropped a bombshell that is sure to prompt an SEC investigation.

Tesla stock price dropped 10% pretty much instantly. As if the divisive rhetoric to make half of his followers turn on him wasn’t enough. He also had to go and directly hurt his investors.

Back in 2018, Elon sent out this infamous tweet.

After this Elon was forced to resign as chairman of the board of directors at Tesla. He was also required to pay a thirty million dollar fine. I think it’s very likely that Elon violated SEC regulations here, and I don’t expect they’ll go too easy dealing with a repeat offender.

This article from The Verge suggests Elon might not be completely screwed. His use of “imo” or “in my opinion” might give him some room to argue that he is just stating his opinion, and this might not constitute market manipulation. But the damage has been done, and Elon has put Tesla in a very difficult position.

My take

It seems like Elon is currently really stressed out. Many people are pointing to the fact that his girlfriend is due to have a baby any day now. On top of that, Elon is in the very difficult position of not being able to open his factories.

His blast against stay at home orders makes sense from a business perspective, even if the optics aren’t the best. In the Q1 financial report, Tesla claimed they had the capacity to produce half a million cars this year despite factory shutdowns. I believe these estimates were made under the assumption that stay at home orders would be lifted quickly. When Elon saw the stock go up after they released Q1 financials, and he realized Tesla might not be able to hit those numbers with a lockdown in effect, he freaked out and realized Tesla might be overvalued.

Whatever the reason, Elon’s excessive tweeting is hurting Tesla. I was under the impression that someone at Tesla was in charge of moderating what Elon can tweet. Whether Elon is dealing with external stresses doesn’t matter. He should not be able to instantly tank the valuation of the world’s most valuable automaker with a single tweet from the toilet.

What happens next?

No matter the reason, Elon is sure to take heat from the SEC for this. In 2018 the SEC gave him a thirty million dollar slap on the wrist. I don’t expect they’ll be so kind this time around.

There’s no way to know what the backlash from this will be. Elon is likely to pay a hefty fine and may be forced to resign from Tesla’s board of directors. Tesla may even try to completely distance the company for him. Or worse, make him delete his twitter. What will I write news about then?

But frankly, they’d be right to do so. Elon Musk has done more than anyone to push electric vehicles into the mainstream. He has helped make Tesla the most valuable automaker in the world, making all the cool EVs we love so much. Tesla is years ahead of the competition, and they’re not slowing down. Right now, the only thing that could possibly stop Tesla, is another dumb tweet from Elon.

We hope you enjoyed reading! Let us know your thoughts in the comments down below. And make sure to follow our social media up top for all the latest electric vehicle news!

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