3Comments
It's no wonder Elon Musk is looking at a subscription model for Twitter, given that his tweets have in the past cost him millions of dollars to post. In 2018, he jokingly said he was "considering taking Tesla private at $420", an apparent reference to "420", a stoner term for smoking weed.
Though he found it funny, the Securities and Exchange Commission (SEC) did not. They labeled the tweet as "false and misleading" to investors, and fined him $20 million, as well as an extra $20 million for Tesla. In a separate incident, he tweeted "Tesla stock price too high IMO" and wiped $14 billion of his own company's value.
The ordeals might have prepared him for some wildly-fluctuating values as he tried to actually buy the social media platform. Let's hope it has, as since he announced his intention to buy Twitter on April 14, his net worth has sunk by $49 billion. The latest drop came on Wednesday, as his worth dropped $12.3 billion in a day, reports Bloomberg.
A number of factors led to the drop, including the exclusion of Tesla from the S&P 500 ESG Index, which measures companies on environmental, social, and corporate governance performance. Reasons for the exclusion include a lack of details about its low carbon strategy, claims of racial discrimination at the company's California plant, and crashes of autopilot vehicles themselves.
"A few of the factors contributing to its 2021 S&P DJI ESG Score were a decline in criteria level scores related to Tesla’s (lack of) low carbon strategy and codes of business conduct," an explanation from the Index read. "In addition, a Media and Stakeholder Analysis, a process that seeks to identify a company’s current and potential future exposure to risks stemming from its involvement in a controversial incident, identified two separate events centered around claims of racial discrimination and poor working conditions at Tesla’s Fremont factory, as well as its handling of the NHTSA investigation after multiple deaths and injuries were linked to its autopilot vehicles."
Musk was not too happy with the decision.
"Exxon is rated top ten best in world for environment, social & governance (ESG) by S&P 500, while Tesla didn’t make the list!" Musk responded in a tweet, adding "ESG is a scam. It has been weaponized by phony social justice warriors."
He went on to explain (in a tweet he has now pinned) that he would be voting Republican for the first time.
The larger drop of $49 billion since he announced his intention to buy Twitter is fueled partly by a wider market tumble, as well as concerns about how he could fund buying his favorite social media platform, with some questioning whether he can really afford it at all. The problem could get worse if stock at Tesla continues to fall.
"If Tesla's share price continues to remain in freefall that will jeopardise his financing," Oanda senior market analyst Ed Moya told BBC News. Musk currently considers the deal on hold, pending an investigation into the percentage of the site's users that are bots, and faces a possible $1 billion charge if he pulls out of the deal entirely.
Musk has gone on record saying that his purchase of Twitter is "not a way to make money", adding "I don't care about the economics at all". The main appeal of purchasing the site, according to Musk's own statements, is to provide a "free speech" platform for debate. Let's hope that is true, as, at the moment, it is not doing great things for his bank balance. Not that he'll notice any material difference, as the world's richest man.
