Tesla shares crash over CEO Elon Musk's controversial ‘stock price too high’ tweet, rebound later

San Francisco: Tesla shares stumbled after its eccentric CEO Elon Musk tweeted on Friday that the company’s stock price was “too high”, triggering a free fall in stock prices.

According to reports, Tesla shares fell nearly 12% in the half-hour following his tweet.

Tesla stock price is too high imo — Elon Musk (@elonmusk) May 1, 2020

However, Tesla shares rebounded later in the day to close at USD 701.32 a share, a 7.17% decline from the opening.

Musk’s latest tweet was reminiscent of his controversial tweets in August 2018 when he posted about Tesla "going private" at USD 420 a share which had cost him his role as Tesla Chairman.

Tesla`s market valuation was worth around USD 141 billion before the first tweet and it reached around USD 133 billion.

One user replied to Musk saying, "Are you doing it because you need the cash or is this to protest the world burning down?"

Musk replied, "Don`t need the cash. Devoting myself to Mars and Earth. Possession just weigh you down".

His August 2018 tweet had resulted in Musk and Tesla reaching a settlement of fraud charges with the US Securities and Exchange Commission (SEC) in September that year.

The settlement included USD 40 million in penalties, split between the company and Musk, and the removal of Musk as chairman of the Tesla board.

Terms of the deal also required Tesla to impose controls to oversee Musk`s social-media communications. It was unclear Friday whether such controls have been in place, and Tesla did not immediately respond to a request for comment.

Musk is supposed to seek pre-approval if his tweets include anything regarding the company`s securities, including his acquisition or disposition of shares, non-public legal or regulatory findings, or decisions.