The announcement regarding a purchase of 10K units Tesla vehicles made by car rental company Hertz last week has led to a surge of stock prices for both companies. However, Musk tweeted on the 2nd of November to clarify that Tesla has not yet signed any contracts with Hertz.
The stock prices of Tesla rose by 55% in the past month, and it became the fifth company that exceeded one trillion in market value, with one of the main factors being Hertz’s announcement in purchasing 100K Tesla vehicles for the use of the fleet.
US car rental leader Hertz declared bankruptcy last year due to the pandemic. In order to get back in the saddle, the company announced an investment of US$4.6 billion on purchasing 100K Tesla vehicles, of which 50K will be used as rentals for Uber drivers.
The news led to a continuous increase in Tesla stock prices, who had a closing price of US$909 on October 22nd, and rose to US$1,024 on the next trading day after Hertz’s announcement, before surpassing US$1,200 as of the 2nd of November.
That is when Musk decided to terminate the surging trend of his company’s stock prices, who tweeted in late night, “If any of this is based on Hertz, I’d like to emphasize that no contract has been signed yet.”
Musk commented that Tesla has far more demand than capacity, so the same margin to consumers will be applied when selling cars to Hertz. “Hertz deal has zero effect on our economies,” said Musk.
The tweet struck a heavy blow to the stock prices of Tesla, where a rapid reduction of 3% was seen for a closing price at US$1,172.
Musk’s tweet also served another meaning, which is that Tesla vehicles are never in short demand, and it does not require a bulk order bundle for its major models Model 3/Y to any fleets. Consumers will not have to worry about the progress of delivery.
On the other hand, Hertz isn’t trying to implement stock speculation by releasing false news. The company has indeed placed an order, and initiated its EV rental service. What this means is that there are no differences between Hertz and the mass public when purchasing vehicles, and the only differentiation is that the company plans to purchase 100K units continuously within a year or so.
This is not the first time Musk tries to inhibit his company’s stock prices. He had tweeted multiple times criticizing the excessively high stock prices of Tesla, and he merely adopted a new method in undermining favorable news this time. Judging by the increases over the past two years, the more Musk tried to sabotage the market trends, the higher Tesla climbed.
Despite tweeting on the 2nd, Musk is actually concerned about the progress of Giga Berlin that is now once again delayed. Brandenburg, where Giga Belin is situated, is recently bearing witness to a new round of environmental impact debate between environmental protection groups and the local government, and the worst case scenario may be prohibition for the construction of the plant, which is not something that the German government wishes to see.
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