Get best of the week

Retrospective: how Elon Musk affects Tesla's stock price



Image: Unsplash

In the past few days, everyone has been watching closely not for the electric vehicle manufacturer Tesla, but for another company, Ilona Mask SpaceX. However, in early May, the entrepreneur brought down the value of Tesla shares with his statements on Twitter. This was by no means the first time that Musk influenced the value of shares and the capitalization of a business by statements on social networks.

We decided to follow exactly how he did it, and how the entrepreneur’s attitude to the growing capitalization of his company changed.

May 2020: “Stocks are too expensive”


The most recent example of Mask's influence on Tesla's stock price. On May 1, he tweeted a short message: "Tesla shares are worth too much."


After that, securities fell in price by 10% in a short time, and the company's capitalization fell by several billion dollars.

Elon Musk does not get paid in the company. Its compensation package consists of options on securities, it is divided into 12 parts. Musk receives a reward when fulfilling the specified parameters for the company's market capitalization. The growth of Tesla shares in 2020 unblocked the first part of the option program - the entrepreneur was able to buy 1.69 million shares of Tesla at a price of $ 350.02

Observers are still wondering why Mask needed to oppose the rise in Tesla's stock in such a situation. Many of them agreed that this was a protest against the actions of the authorities - Musk is an ardent opponent of tough quarantine measures against the backdrop of the coronavirus pandemic. Also, according to the SEC concluded with the American Securities and Exchange Commission, the entrepreneur must receive the approval of all his tweets related to the company from the board of directors - he confirmed to reporters that this time he did not do this.

As a result, Wired conducted an investigation into whether he faces a problem with the authorities as a result of these actions - everything looks like this time the entrepreneur will be able to avoid serious problems.

August 2018: Opportunity to make Tesla a private company


Two years ago, problems could not be avoided - then Elon Musk also tweeted that he was considering withdrawing Tesla shares from the exchange, making the company private again. Allegedly, the entrepreneur wanted to buy back all the shares at a price of $ 420 per share - it is much more expensive than the securities were worth at that moment - and already even found financing for the implementation of the plan.

Then the SEC opened a case under the article on stock price manipulation, as a result of which Musk was forced to conclude a settlement agreement with the agency. One of the points of the agreement was the need to coordinate public statements about the company's finances and business performance.

May 2017: company capitalization is too high


Three years ago, Elon Musk believed that his company’s market capitalization was too high. In the spring of 2017, Tesla was estimated at about $ 50 billion (in the spring of 2020, this figure is $ 130 billion). Then, in an interview with The Guardian, Musk admitted that he considers the estimate too high:

“I am convinced that such an assessment is significantly higher than what we have the right to rely on. We are a company that is losing money. ”

At the same time, on Twitter, he expanded his thought in more detail. In response to allegations of a too high share price, the entrepreneur replied:

“Tesla is an absurdly overrated company when looking at the past, but that doesn't make sense. The stock price reflects future risk-adjusted cash flows. ”

In the spring of that year, stock prices set a new record, approaching $ 310 apiece.



Today, Tesla shares cost $ 835 apiece.

You can buy shares of Tesla and other American companies from Russia without having to open a separate brokerage account with foreign brokers. Using the St. Petersburg Exchange foreign securities market, investors can buy 500 liquid shares of leading companies in all sectors of the global economy, including all shares of the S&P 500 index.

To make transactions with such shares, you need a brokerage account - you can open it online .

Read reviews, market analytics and investment ideas in the ITI Capital Telegram channel

More articles:


All Articles