Tesla’s bond prices have hit a record low following CEO Elon Musk’s renewed attack on the British cave rescuer who saved the lives of a Thai soccer team.
Tesla bond and stock prices dropped sharply this week following CEO Elon Musk’s attacks on Vern Unsworth, the British cave rescuer who saved the lives of a Thai soccer team stuck in an underwater cave. Tesla stock price dropped 2.8 percent to $280.74, the lowest figure since late May, while Tesla’s $1.8 billion high-yield bonds hit a record low price on Wednesday, as a result, it has become more expensive to insure Tesla’s bonds against default.
Since Musk tweeted on August 7 about having “funding secured” to take the company private, Tesla’s stock has lost approximately a quarter of its value. Investors have also allegedly become worried about Musk’s erratic behavior, specifically his attacks on Unsworth. Unsworth’s lawyer, L. Lin Wood, said in a recent email to Reuters: “Elon Musk’s ongoing campaign of publishing vile and false accusations against Mr. Unsworth is outrageous. Musk has publicly and clearly stated that he ‘hopes’ to be sued. Let me be equally clear in response — Musk will be sued — not because of his hopes, but because he deserves to be sued.”
Tigress Financial Partners analyst Ivan Feinseth commented on Musk’s tweeting saying: “He should not tweet about things outside of car production and the auto industry. The board, even though it is friendly to him, has now been put in a position where the internal governance of the company has been questioned.”
Tesla has had a number of lofty goals during their course of running their business, some of which were met with skepticism even by those working with the company. Tesla began evaluating auto-parts supplier Nemak SAB as a possible supplier to use during the course of their Model 3 production cycle. Musk had stated that the company would be producing as many as 500,000 vehicles by 2018, an estimate that even Nemak SAB found to be too high.
Nemak Chief Executive Officer Armando Tamez said: “We’re a company that’s always looking to grow, but we’re fairly conservative… We saw a high-risk project.” Tamez further stated: “Musk has been a strong force in the electrification of cars, and technology is undoubtedly heading in that direction. I do wish him all the best; we just thought it was too high risk for Nemak.”
Given the production issues that Tesla has faced in recent months, it seems that Nemak may have been correct in not working with the company.