In 2020, Elon Musk caused a significant drop in Tesla’s stock value with a single tweet. The billionaire CEO tweeted, “Tesla stock price too high imo,” leading to a 12 percent plunge in the company’s shares, ultimately wiping $14 billion off Tesla’s market value. The tweet also resulted in a personal loss of $3 billion for Musk himself. This incident occurred despite Musk’s prior agreement with the U.S. Department of Justice to have his social media posts vetted by Tesla’s legal team to avoid market-altering statements.
Musk’s tweet, which was not pre-approved by his legal team, sparked frustration among investors and raised concerns about his social media use. Analysts viewed the comment as Musk being provocative, but it highlighted the impact his statements can have on the market. This wasn’t the first time Musk faced scrutiny for his online activity; a 2018 tweet about taking Tesla private led to a settlement with the SEC requiring him to get approval before making such posts.
The incident underscores the challenges that come with balancing the outspoken nature of high-profile business leaders like Musk with the stability expected by shareholders and the market. Despite this, Musk continues to maintain his candid presence on social media, often sparking both controversy and admiration.
