Tesla CEO Elon Musk is certainly no stranger to tough times, but for much of the past few years — save his ongoing battle with the Securities and Exchange Commission — everything’s been going his way: until now.
Musk is having a very bad week, and it’s culminating in another tough day for the company’s stock, which is worth a little more than half what it was about six weeks ago. Just today, on the heels of sexual harassment allegations, it’s into the $660 range in late afternoon trading, about a 6.5% drop; however, it did get as low as $633 a share.
The company’s 52-week high is $1,243.49, which it achieved last November, but it was as high as $1,145.45 last month. Since then, Musk’s faced a series of issues that have seemingly hampered the belief the market had in the man who was — until recently — the world’s richest man.
Not so friendly skies
It came to light earlier this week that Musk was accused of sexually harassing a flight attendant who worked for SpaceX in 2016. According to Business Insider, Musk engaged in series of lewd activities during a flight resulting in the company paying a $250,000 settlement to the woman in 2018.
Musk denied the accusations in several tweets early Friday morning.
“I have a challenge to this liar who claims their friend saw me ‘exposed’ — describe just one thing, anything at all (scars, tattoos, …) that isn’t known by the public. She won’t be able to do so, because it never happened,” he tweeted early Friday morning.
He also used Twitter earlier this week to declare his allegiance to the Republican Party after voting Democrat “in the past.” He then predicted a “dirty tricks campaign” would be coming. In fact he predicted it twice. Reportedly, this warning came after Business Insider contacted SpaceX officials seeking comment about the sexual harassment allegations and before the story was published.
Musk is a prolific user of the social media outlet. In fact, he’s essentially eschewed a public relations team in favor of taking his message directly to the people. While he’s got 94.2 million followers, not all of them are fans of the serial entrepreneur.
As is often the case, when he sees something he believes is wrong he can’t help but comment on it, fight it or buy it. In the case of Twitter, which he believes is the public’s “town square” he began criticizing the social media outlets censorship rules.
That campaign culminated in him selling 9.6 billion shares, or $8.5 billion worth, of Tesla stock and securing other investors to make a $44 billion bid for Twitter. According to SEC filings, he sold those shares April 26-28.
However, the sale is now in limbo, with Musk claiming it’s on hold and Twitter officials denying the claim, the company’s top lawyer saying “there’s no such thing as putting a deal on hold.” Musk says the number of subscribers the outlet has is artificially inflated by bots — 20% of the subscribers are bots, he claims. Twitter counters the number is less than 5 percent.
Some are speculating that Musk is looking to cast doubt on the numbers in search of a better deal or to get out of it entirely; however, Twitter officials are saying the deal is what the deal is: pay the $44 billion or pay the penalties for backing out of the agreement, said to be in excess of $1 billion.
It ain’t easy being green
Musk was also quick to jump on the S&P 500 ESG Index, which dropped the company from its listing. The ESG, which includes companies with strong records on environmental, social and governmental issues.
He called the index a “scam” and wondered how a company focused on building electric vehicles can be dropped while oil and gas producer Exxon was added to the index. The S&P pointed to several issues regarding the company’s performance on social and governmental issues as the reason for dropping the EV maker.
“While Tesla may be playing its part in taking fuel-powered cars off the road, it has fallen behind its peers when examined through a wider ESG lens,” Margaret Dorn, senior director and head of ESG indexes for S&P Dow Jones in North America, said in a Tuesday blog post.
She noted the company was facing potential problems due to two claims of racial discrimination at its Fremont, California plant as well as the ongoing investigations by federal safety regulators tied its semi-autonomous Autopilot program.