We don’t feel like we would be going out on a limb in taking a guess that Elon Musk's talks with the SEC over an amended settlement agreement – as recently ordered by Judge Alison Nathan - may not be going well. Or, at the very least, the CEO's antics this weekend on Twitter may have thrown them off the rails, if they hadn’t already been.
Just days ahead of Tesla's
next desperate carrot on a string to raise cash "Investor Autonomy Day" and its Q1 earnings report, Elon Musk took to Twitter on Sunday – tweeting for hours on end – and not only lashing out at former ally Panasonic, but also at media outlets including Bloomberg and the Wall Street Journal.
And true to form, it wouldn’t be an Elon Musk tweet storm without the CEO offering up material changes to the company’s guidance. He wrote on Sunday that Tesla will make more than 500,000 cars in the next 12 months, new guidance that differs from the 500,000 cars produced for 2019 guidance that landed Musk back in hot water with the SEC a couple months ago.
Very much so. There are 2.5B cars & trucks on Earth. Even replacing 1% of that fleet would require making 25M vehicles per year. Tesla will make over 500k cars in next 12 months, but that’s a mere 2% of 25M or 0.02% of global vehicle fleet. Car industry slow -> demand >> supply.— Elon Musk (@elonmusk) April 14, 2019
Issuing unchecked guidance over Twitter is the issue that Musk is currently in the midst of battling the SEC about in court, where the regulator is trying to hold him in contempt for Tweeting material information without having it approved by a court mandated "Twitter Sitter".
Musk also went one iteration further on Twitter, blaming Panasonic's battery cell production capacity for "constraining the output" of Tesla's Model 3 sedan. Musk disputed reports that Panasonic had boosted annualized battery cell production capacity at Tesla's plant to 35 gigawatt hours. In a subsequent tweet, he appeared to try and walk back and clarify his original tweet:
Incorrect. Pana cell lines at Giga are only at ~24GWh/yr & have been a constraint on Model 3 output since July. No choice but to use other suppliers for Powerwall/Powerpack cells. Tesla won’t spend money on more capacity until existing lines get closer to 35GWh theoretical.— Elon Musk (@elonmusk) April 13, 2019
There is 35 GWh/yr “theoretical capacity”, but actual max output is ~2/3. It was physically impossible to make more Model 3’s in Q1 due to cell constraints.— Elon Musk (@elonmusk) April 14, 2019
Follow up questions regarding Panasonic's line from CNBC's Lora Kolodny, seemed to go ignored:
1) What is “incorrect” in Tom’s tweet? 2) Are you saying Panasonic’s installed capacity is not 35 GWh/yr at GF1? 3) Is Panasonic’s output at 24 GWh/yr? 4) If yes to 3 above, is that enough to hit your low end 2019 Model 3 deliveries forecast?— Lora Kolodny (@lorakolodny) April 14, 2019
Musk then went on to take shots at the Wall Street Journal for "relentlessly attacking" Tesla and publishing "bogus articles for over a decade". Musk also alluded that the WSJ was in bed with the oil and gas industry:
I’m sorry, Fred, but WSJ has relentlessly attacked Tesla with bogus articles for over a decade. They can’t *all* be chalked up to poor reporting. Where are the WSJ exposé pieces on oil, coal & gas? That industry is 1000 times bigger than Tesla. Perhaps they’re all angels …— Elon Musk (@elonmusk) April 14, 2019
In a later Tweet, he called the WSJ "sock puppets of big oil":
Holman Jenkins & WSJ in general are sock 🧦 puppets of big oil— Elon Musk (@elonmusk) April 14, 2019
Which is especially funny, given the relationship of Tesla board member James Murdoch to the WSJ:
Musk also went off on Bloomberg's Dana Hull, who asked Musk on Twitter how his talks with the SEC were going. Musk acknowledged a Tesla fan's reply, claiming Hull had a "12 step program to stop hating Elon Musk" by saying "Haha true":
Haha true— Elon Musk (@elonmusk) April 14, 2019
When Musk was informed that Tesla followed Hull on Twitter, Musk said it was "embarrassing" and "would change":
How embarrassing. Will change.— Elon Musk (@elonmusk) April 14, 2019
And finally, among other things, the ever-widening Musk also took a shot at Warren Buffet for "destroying Dairy Queen":
Mr Buffett, please stop destroying Dairy Queen. In the name of all that is holy, please stop.— Elon Musk (@elonmusk) April 14, 2019
Musk's Tweet storm lasted the better part of Sunday, concluding late Sunday night/early Monday morning EST. Twitter immediately took notice and recognized the potential consequences of Musk's tweets:
“Warren Buffett is a terrorist!” LOL pic.twitter.com/Pgc4z8XTud— Quoth the Raven (@QTRResearch) April 14, 2019
Despite being owned by Theranos investor Rupert Murdoch, the WSJ blew the lid on the Theranos fraud.— "Elon Says" (@ElonBachman) April 14, 2019
"Big Oil" didn't cause the frauds at SolarCity and $TSLA, Musk did. And that's how the WSJ will report it. https://t.co/KIcJWLNRnV
James Murdoch is on your board. Isn’t that kind of like complaining to Larry about “Big Database” ? https://t.co/80rDuolNgv— Keubiko (@Keubiko) April 14, 2019
With the company and the SEC scheduled to present a new settlement agreement to about Musk's future communication rules via Twitter on April 18, Sunday's outburst could make for a timely “Exhibit A" should the SEC decide to actually do their job and go after him aggressively. We're not optimistic.