BlackRock set to bank at least $162 million over Elon Musk’s earnings tweet

Tesla owes JPMorgan Chase some serious back pay. The carmaker owes the Wall Street bank at least $162 million over an Elon Musk tweet, reported The New York Times. JPMorgan and another investment bank, Goldman Sachs, had loaned Tesla $1.3 billion as recently as October.

Musk claimed in August that he was considering taking Tesla private at $420 a share, a buyout valuation he called “incredible.” Over 200,000 tweets were filed by short sellers — investors who bet on a stock going down — since Musk’s tweet.

Musk backtracked on his previous takeout price in the following months, telling reporters on Sept. 14 that he “fundamentally disagree[d] with a privatization at $420.” Yet when Tesla’s quarterly earnings report hit investors’ inboxes the next day, they found this gem:

This year’s company operating results are set to blow away $420 billion market cap.

Help us achieve this astounding goal?

Become a shareholder today.

$TSLA $420 — Elon Musk (@elonmusk) September 27, 2017

Subsequently, Musk, under pressure from Tesla’s need for capital, settled with the Securities and Exchange Commission for $20 million and a self-imposed ban from making the giant claim again — or from “making such forward-looking statements.” Tesla said in a regulatory filing this past October that Musk’s social media gaffe had cost it $82 million, but at the time, the company said it would still be able to hand over dividends to investors. In January, Tesla paid back the bank that owed it the cash — Tesla to Tesla.

This February, some members of Tesla’s board of directors made headlines when they accused Musk of misusing Twitter. “We are troubled by the CEO’s highly provocative tweets, inconsistent public statements and lack of accountability for others with whom he interacts on Twitter,” said current Tesla board members Robyn Denholm, James Murdoch and Antonio Gracias in a statement. Musk defended his social media use in an interview with Charlie Rose in March.

Despite such squabbles, Tesla is still faring well financially. In May, Tesla reported its second quarter profit had approached the previous record, having already released the company’s first profit in over a year in April. Tesla is set to release its third quarter earnings in July.

In February, Musk stunned the mainstream media when he made a big proposal to another Wall Street bank — financial services company BlackRock. BlackRock’s CEO, Larry Fink, invited Musk to join his advisory board. BlackRock is one of Tesla’s largest shareholders, owning close to 0.7 percent of Tesla shares.

Read the full story at The New York Times.


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