Tesla Motors Inc CEO Elon Musk is feuding again publicly, this time with a reporter who said something about Tesla that Musk did not like. Musk censured a veteran financial journalist at Fortune magazine for implying that the EV maker was acting unethically by taking two months to publicly reveal a deadly crash in one of its semi-autonomous cars.
Tesla intentionally kept the news secret
Tesla sold more than $2 billion of stock – at a price of $215 a share – just 11 days after the May 7 crash, where a driver died while using his Model S sedan’s “Autopilot” function on a Florida highway. The driver was reportedly watching a movie.
In a story published on Tuesday morning, Carol J. Loomis – a former senior editor-at-large – wrote, “To put things baldly, Tesla and Musk did not disclose the very material fact that a man had died while using an auto-pilot technology that Tesla had marketed vigorously as safe and important to its customers.” Loomis is a senior editor who has spent 60 years at the venerable financial glossy.
Loomis reported that the carmaker privately informed the NHTSA [National Highway Traffic Safety Administration] of the car crash, and the agency did not disclose the news about the crash for eight weeks. During that time, Tesla Motors Inc sold more than $2 billion of stock in a public offering.
You can’t win a Twitter war with Musk
Loomis said Musk himself joined the conversation, when she contacted Tesla for a comment. At first, he thought Fortune was criticizing the price at which the electric carmaker sold stock, but the writer replied that was not the case, and the issue was the non-disclosure of a material fact. To that, Musk replied the car crash “is not material to the value of Tesla.”
Musk further wrote that around half a million people – in over 1M auto deaths per year worldwide – would have been saved if the Tesla autopilot was universally available. He asked the writers to take 5 minutes and “do the bloody math before you write an article that misleads the public.” In addition, Musk indicated that the stock price rose after the firm made public the news of the crash.
Later, Musk sort of argued with Fortune editor Alan Murray, who tweeted “Seems pretty material to me..” To this Musk replied, “Yes, it was material to you — BS article increased your advertising revenue. Just wasn’t material to TSLA, as shown by market.” Musk said if Murray cares about the auto deaths as material to stock price, then why there are no articles “about 1M+/year deaths” from other auto companies?
Tesla Motors Inc Model S autopilot crash story is still developing, and it is possible it might change the course of the self-driving car’s future.
In pre-market trading today, Tesla shares were down almost 2%. Year to date, the stock is down over 10% while in the last one-year, it is down almost 24%.