Musk’s Crazy Week: Cheap Teslas, Snarky Tweets, Historic Launch
(Bloomberg) -- Even by his own super-human standards, Elon Musk had a manic week.
First, the billionaire got into a spat with the U.S. Securities and Exchange Commission over tweets about Tesla Inc. The regulator wasn't amused when he took to Twitter to say its oversight is “broken."
Then Tesla unveiled its $35,000 Model 3, a sedan with a glass roof that can travel 220 miles on a single charge. While the cheaper electric vehicle fulfills a longtime goal of Musk's, the company also said it'll be closing its retail stores and eliminating jobs. Tesla shares tanked Friday after the company said it no longer expects to turn a profit in the first quarter, and later in the day the U.S. National Transportation Safety Board said it's investigating a fatal crash involving a Tesla vehicle in Delray Beach, Florida.
Now, he's just staring down space history. In the wee hours of Saturday morning, SpaceX launched its Crew Dragon spacecraft, loaded with a mannequin covered in sensors and about 400 pounds of cargo, from the Kennedy Space Center in Florida. The launch was a major test for Musk and NASA to see if they can bring human space travel back to the U.S.
March 2, 2019Here's a blow-by-blow of six spectacular days in the life of Elon Musk.
Monday
The U.S. SEC seized on tweets the Tesla chief executive officer sent six days earlier to claim he violated a settlement reached in September that prevented him from communicating material information without the company's approval.
The agency asked a federal judge to find Musk in contempt of the agreement after he posted Tesla will make half a million electric vehicles this year. The SEC revealed the tweet Musk sent a few hours later, which clarified he meant to say production will reach an annualized rate of 500,000 cars by the end of 2019, was crafted with the help of an in-house lawyer.
Read more: Musk's mystery ‘Twitter Sitter' has wild-and-crazy job
Tuesday
Musk didn't take the SEC's scrutiny well, writing to his more than 25 million followers that “something is broken with SEC oversight.”
Legal experts said the CEO could be facing millions of dollars in additional fines, tighter restrictions on his use of social media and even a possible bar from running the company.
Wednesday
Musk moved Tesla shares by sending a series of vague tweets hinting at news the company would announce the following day. Wild speculation ensued after he changed his name on Twitter to “Elon Tusk.”
In a nod to SpaceX, he then made his profile photo an image of Mars and added an alien emoji. He sent out another strange missive: “ET phone home. No answer.”
Thursday
Tesla briefly stopped taking orders for vehicles on its website, which redirected visitors to a page teasing the announcement Musk tweeted about earlier.
The news finally landed: Tesla made a $35,000 Model 3 available and introduced lower-priced versions of the Model S and Model X. Musk said the company can afford to do this because it's cutting costs by moving to online-only ordering and culling an unspecified number of jobs.
The CEO told reporters on a conference call that Tesla probably won't earn a profit in the first quarter, citing one-time charges and challenges getting cars to China and Europe. He predicted the company will go back to earning money in the second quarter.
March 1, 2019Musk gave yet another forecast for how many vehicles Tesla will produce this year, predicting somewhere in the range of 420,000 and 600,000.
Read more on everything that went down
Meanwhile, a filing in federal court in Manhattan revealed Musk is bringing in a new legal team to defend himself against the SEC. He's turned to former Enron Corp. prosecutor John C. Hueston and three other lawyers from Hueston Hennigan LLP to take over from Williams & Connolly. The latter firm employs Dane Butswinkas, who relinquished the role of Tesla general counsel last week after just two months.
Friday
While the overall sense on Wall Street was that Thursday's big reveal had something for both Tesla bulls and bears, the market pretty much hated it. Shares dropped 7.8 percent, their biggest decline in six weeks.
The decision to shift to an online-only sales strategy struck some as a sign that the company was unable to squeeze out further savings from its Model 3 production process, while others took it as a signal for strong demand. Analysts also voiced concerns about the impact that the $35,000 Model 3 will have on Tesla's profitability.
The company also said it had paid off its $920 million convertible bond obligation in cash.
Later in the day the NTSB said it's conducting a safety investigation of a fatal crash involving a Tesla vehicle in Delray Beach. It wasn't immediately clear if Tesla's driver assistance feature known as “Autopilot" was enabled during the incident.
Saturday
Musk founded SpaceX in 2002 with the goal of enabling humans to live on other planets.
The company successfully launched an unmanned Crew Dragon craft from Florida to the International Space Station early Saturday, a milestone for Musk on that journey and a big win for NASA's gamble of partnering with private industry.
Scores of space tourists gathered in Florida to watch the 2:49 a.m. launch of the Falcon 9 rocket, which went off without a hitch.
If all goes well, Crew Dragon could begin ferrying American astronauts to the orbiting lab as early as this summer.
To contact the reporters on this story: Craig Trudell in New York at ctrudell1@bloomberg.net;Dana Hull in San Francisco at dhull12@bloomberg.net;Esha Dey in New York at edey@bloomberg.net
To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, James Amott
©2019 Bloomberg L.P.
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