Elon Musk’s tweets result in Tesla stock volatility but keep the electric car company headlining news

Following confusion over the Hertz-Tesla EV car sales agreement, the car maker’s CEO grabs more online attention, tweeting a poll to sell 10% of his shares.

(Credit: Getty Images)

Some Twitter users are responding to the Tesla CEO billionaire Elon Musk’s recent Tweets with suspicion.

“Any bets @elonmusk created the poll on Twitter (to sell 10% of his Tesla stock) to cause Tesla's share price to drop and then subsequently hoover up the shares on the cheap,” tweeted Mike Dolan @mrdognuts, early Monday morning. “I think this kind of practice should be outlawed.”

On Saturday, amid political conversations about making the wealthiest people in America pay their fair share in taxes, Musk conducted a Twitter poll. He proposed to sell 10% of his Tesla stock. Of the 3.5 million people who took the poll 57.9% supported the sale while 42.1% did not.

— Elon Musk (@elonmusk) November 6, 2021

Musk tweeted that he doesn’t draw a salary, so only pays personal taxes if he sells shares. The New York Times reported that Musk has nearly 23 million stock options that have vested and will expire in August 2022. Tax experts explained that much of these options likely did not qualify for preferential tax treatment and there was no way for Musk to avoid paying an approximately $15 billion tax bill, upon exercising his options. 

Last Friday, Tesla’s stock was at $1,222.09 per share, when the market closed. But by 9:30 a.m. on Monday, November 8, the stock price had dropped to $1,148.1, in the afternoon rising to $1,185.32, which still represented an approximately 3% decline.

The recent Tesla headlines followed Tesla and rental car company Hertz last week giving contradictory messages concerning 100,000 electric vehicles, which Hertz had previously announced it was buying from Tesla. Ultimately, it seems Hertz will wait for delivery of the vehicles, according to the Wall Street Journal.

Nonetheless, Tesla’s and Hertz’s diverging communications also brought corporate reputations into question.

Twitter user Christian Hensen @henseat tweeted: “Someone is lying. @elonmusk #tesla or #hertz.”

Back on October 25, Hertz had announced it was buying an initial order of 100,000 EVs by the end of 2022 from Tesla, as part of converting 20% of its global fleet to electric vehicles. Based on the sticker price, the deal would total $4.2 billion. The news pushed Tesla’s stock value above $1 trillion. 

On November 1, Tesla Silicon Valley Club tweeted a graph showing the upward jump in the company’s stock. 

However, Tesla CEO Elon Musk replied on Twitter: “If any of this is based on Hertz, I’d like to emphasize that no contract has been signed yet. Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers.

This resulted in Tesla’s stock dropping 4.0%, tumbling to $1,159, with shares losing $40 billion in value by last Tuesday afternoon. However, by Thursday, November 4, the car maker’s stock rallied, climbing to $1,228.48 per share by noon.

On November 2, Hertz’s stock closed at $35.06 a share, up by 2.6%. Its shares fell 7.4% to $32.45 a day later but by November 4 at noon the shares were at $34.18. This Monday, November 8, it’s shares were at $32.82 per share, when the market opened. In comparison, on October 20, prior to its announcement of the Tesla deal, its stock was trading at $25.06 per share.

When asked to comment on the contradictory information about the Hertz-Tesla deal and plans for future messaging, Hertz emailed PRWeek the following statement on November 2:

“As we announced last week, Hertz has made an initial order of 100,000 Tesla electric vehicles and is investing in new EV charging infrastructure across the company's global operations. Deliveries of the Teslas already have started. We are seeing very strong early demand for Teslas in our rental fleet, which reflects market demand for Tesla vehicles.”

Tesla did not return a request for comment.

Although the companies may have decided to stop publicly airing any differences, #Tesla and #Hertz trended on social media with people expressing confusion.

Twitter user Exponential Wealth Building @DeFiMaverick tweeted, “Tesla & Hertz should disclose the contract publicly. #Wallstreetbets #Reddit #Bitcoin #Dogecoin #GME #AMC #Tesla #Hertz”

“The whole story makes no sense,” @DeFiMaverick continued. “If I’m buying 100k worth of Teslas, I’m definitely negotiating a great deal or elsewhere.”

Hertz emerged from bankruptcy in June, with investors providing $5.9 billion in capital, with access to an additional $10 million in loans, credit and other debt, according to The New York Times

Last Wednesday, November 3, Hertz announced certain stockholders were launching a public offering of 37.1 million shares, at a discounted price of $25 to $29 per share. The company stated it plans to purchase between $250 million and $500 million of the shares, according to CNBC.

Yet amidst the ongoing business developments, the public response has called for Tesla and Hertz to provide clearer and more accurate public communications. And both companies will need to stay mindful of Securities Exchange Commission regulations. Tesla and Musk already settled one case in 2018 with the SEC requiring that a securities lawyer approve Musk’s social media posts.

As one Twitter handle stocksinthecity wrote, “Investors need answers. @elonmusk (unhappy face) #tesla #hertz @Hertz”

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