Tesla stock split, Shanghai shutdown to Covid, Elon Musk changes the narrative to his advantage

Billionaire Tesla chief Elon Musk has a knack for turning attention away from negative news.

| Updated on: Aug 22 2022, 11:09 IST
Elon Musk
Tesla Inc Chief Executive Officer Elon Musk never cease to amaze when it comes to owning a news cycle. (James Glover II/REUTERS)
Elon Musk
Tesla Inc Chief Executive Officer Elon Musk never cease to amaze when it comes to owning a news cycle. (James Glover II/REUTERS)

Last month, I wrote about Tesla frontrunning California's Department of Fair Employment and Housing by publishing a blog post about the agency's racial-discrimination and harassment lawsuit before the lawsuit was even filed. It was a clear move to get ahead of allegations of widespread mistreatment of Black workers at the automaker's facilities throughout the state.

Tesla and Chief Executive Officer Elon Musk never cease to amaze when it comes to owning a news cycle. Musk generates constant coverage, some of it warranted but much of it fluff, speculation or a regurgitation of his tweets. And when there's a spate of negative news, Tesla often manages to get ahead of it or change the subject.

This weekend was another good case study. The Washington Post published a story Saturday about Musk's dealings with the National Highway Traffic Safety Administration that led with an unsavory anecdote. The CEO threw a fit when agency officials called to say they were investigating the first fatal crash involving Autopilot in 2016, an unidentified former safety official told the Post.

Then, my Bloomberg colleagues reported Sunday that Tesla would suspend production at its Shanghai plant as the local government locks down half the city to conduct a massive testing blitz amid a Covid-19 outbreak. Musk got in on the act, sharing in an oh-by-the-way tweet that Andrej Karpathy, Tesla's director of artificial intelligence, is on a roughly four-month-long “sabbatical.”

And that's not all. Musk disclosed he apparently has Covid again.

By the time premarket trading started Monday, Tesla shares were down less than 1%. None of the above developments were unmitigated disasters: Musk has feuded with U.S. safety officials before; Tesla plans to reopen its Shanghai factory after a few days; Karpathy tweeted he's looking forward to a return; Musk said he has almost no symptoms.

Two hours into the early-trading session, Tesla's verified Twitter account perked up the stock with a post about pursuing a stock split. This was followed by a regulatory filing that raised as many questions as answers. Tesla plans to ask shareholders to approve increasing the amount of common stock it can have outstanding, but didn't say by how much. This will enable a split in the form of a stock dividend, the mechanics of which — including the ratio — aren't spelled out. Also unclear: when Tesla will release its definitive proxy statement and when and where it will hold its annual meeting.

Tesla shares soared 8%, adding $83.9 billion of market value and putting the stock back in positive territory for the year. The shares were down 28% as of Feb. 23, the day before Russia invaded Ukraine.

When I typed Tesla into Google news after all this transpired, stories about the stock split appeared at the top; the Shanghai shutdown and Musk having Covid were further down.

In the coming days, I'll be paying attention to Tesla's first quarter production and delivery figures, which underpin the company's quarterly earnings. And the big event of the spring will be the “Cyber Rodeo” scheduled for April 7 at Tesla's new plant in Austin, Texas. Did you manage to get an invitation? 

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First Published Date: 29 Mar, 22:54 IST