TSLA Tesla Inc

By Tim Higgins 

Tesla Inc. stock plunged Friday morning after Chief Executive Elon Musk took to Twitter to say the auto maker's share price was "too high" in a series of messages he posted on the social-media platform.

Mr. Musk's tweets are only the latest of his missives that have drawn swift reaction from investors. Because of his history on Twitter, he is required by a court settlement to vet any message that might be material to Tesla, though the definition of what exactly must be reviewed has been a subject of dispute.

Asked whether he was joking or if he'd had his tweet vetted before posting it, Mr. Musk told The Wall Street Journal in an email simply: "No."

The latest episode on Twitter began Friday, at 8:10 a.m. California time where Tesla is based, Mr. Musk wrote on his verified Twitter account: "I am selling almost all physical possessions. Will own no house."

A minute later, he added: "Tesla stock price is too high imo" -- an abbreviation for "in my opinion."

Tesla shares, which had closed Thursday at $781.88, an 82% gain for the year, were down more than 9% in midday trading Friday after the Twitter messages.

Investor enthusiasm for Mr. Musk's ambitious growth plans for the electric car maker has sent shares soaring this year even amid fears of a prolonged recession from the coronavirus pandemic.

But Mr. Musk has been railing against authorities' efforts to stop the spread of the virus by shutting down nonessential businesses and keeping people at home. Tesla's lone U.S. assembly plant stopped production on March 23 because of such orders in California. On Wednesday, after Tesla suspended full-year car delivery guidance that had targeted more than 36% growth this year before the pandemic, he compared the effort to fascism and has taken to Twitter to argue for reopening the economy.

Mr. Musk reprised that theme on Friday. After his comment on Tesla's share price, Mr. Musk returned to Twitter four minutes later to say, "Now give people back their FREEDOM" and posted lines from the Star-Spangled Banner.

The billionaire entrepreneur's behavior on Twitter has landed him in legal trouble. In 2018 he announced on the social-media platform that he was considering plans to take the auto maker private, a claim later deemed fraudulent by the Securities and Exchange Commission after it became clear he didn't have funding finalized for such a move.

He denied wrongdoing but eventually settled with a deal that included him giving up his position as chairman of Tesla and agreeing to have any of his Twitter messages relating to the auto maker's business reviewed before publishing them.

Mr. Musk also has a history of posting exaggerated messages on Twitter during trying times. After the deal with the SEC to relinquish his chairman title, he took to Twitter to say he was giving up his title of CEO. "I'm now the Nothing of Tesla. Seems fine so far." A company filing with the SEC this week still listed Mr. Musk as CEO.

Tesla didn't respond to a request for comment on Mr. Musk's tweet or whether the CEO's comment on stock price had been vetted.

Mr. Musk found himself in the SEC's crosshairs again early last year when he posted messages on Twitter discussing the auto maker's projected production volumes. The SEC asked a federal judge to hold him in contempt for violating his 2018 settlement agreement.

The two sides eventually settled the dispute with an arrangement that more clearly articulated what matters for which Mr. Musk would need to seek a review before going public. While the latest version of the settlement agreement doesn't specifically mention comments about Tesla's share price, it says he needs to vet communications about "events regarding the company's securities."

Famed short-seller and Musk critic Jim Chanos appeared to weigh in almost immediately. A Twitter account controlled by Mr. Chanos's firm wrote: "The Musk tweet on the stock price is a material statement by anyone's standard. How is this not a clear violation of his Agreement? What is going on here?"

--Allison Prang contributed to this article.

Write to Tim Higgins at Tim.Higgins@WSJ.com

(END) Dow Jones Newswires

May 01, 2020 13:49 ET (17:49 GMT)

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