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Tesla Tumbles After Musk Casually Tweets “No Contract” Signed On Hertz Deal | ZeroHedge

Abdul Qadeer Khan

From: zerohedge

Tesla Tumbles After Musk Casually Tweets "No Contract" Signed On Hertz Deal | ZeroHedge

Tesla shares are down about 5% in pre-market trading after Elon Musk Tweeted late Monday night that the company's deal with Hertz - widely seen as the catalyst (other than call options) for moving the stock higher over the last week - still hadn't been formalized in a contract.

Once again, it looks to be a case of Elon Musk's Tweets disclosing "relatively material" information (especially given Tesla's stock price move over the last week which gained almost half a trillion dollar in 3 weeks!) that the market otherwise wouldn't have had access to.

Days after the company tacked on hundreds of billions of dollars in "value" following the announcement that Hertz would buy 100,000 Teslas, Musk nonchalantly tweeted in response to a chart of his company's stock: "If any of this is based on Hertz, I'd like to emphasize that no contract has been signed yet."

You're welcome! If any of this is based on Hertz, I'd like to emphasize that no contract has been signed yet. Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers. Hertz deal has zero effect on our economics.

-- Elon Musk (@elonmusk)

November 2, 2021

"Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers," Musk wrote.

Recall, it has now been about 7 days since Tesla

rocketed to new highs

on the back of the Hertz announcement. 

Bloomberg reported at the time that the order marked the "single-largest purchase ever for electric vehicles" and will equate to about $4.2 billion in revenue for Tesla. 

Tesla has gained over $200 BILLION in market cap after an announcement by Hertz to buy 100k cars. Tonight Elon admits no actual contract exists between Tesla and Hertz for such deal!!!! WTF.

-- Stalingrad & Poorski (@Stalingrad_Poor)

November 2, 2021

It was also reported that the order would be delivered over the next 14 months and Model 3 vehicles would be available to rent at most Hertz locations starting in November. 

Hertz was said to be building its own charging infrastructure, in addition to allowing customers to have access to Tesla's Supercharger network. 

And Wedbush's Dan Ives was out with the pom-poms the day after the Hertz report, writing on October 26: "The Hertz deal we believe will be viewed as a tipping point for the EV industry as this 100k Model 3′s/$4 billion+ deal for Tesla speaks to more mainstream adoption for EVs as today only 2% of autos in the US are EV driven compared to 10%+ in China with rapid growth on the horizon. We believe this is the biggest transformation to the auto industry since the 1950′s with more consumers heading down the EV path over the coming years."

We wonder if he knew there was no contract signed at the time. But we digress...

Adding to Tesla's misery on Tuesday, it was also announced that the company would be recalling over 11,000 vehicles sold since 2017 due to a communication error that "may cause a false forward-collision warning",

according to Reuters

.

The recall was "prompted after a software update on Oct. 23 to vehicles in its limited early access Full-Self Driving (Beta) population," the report says.

It marks the second such recall brought to the attention of the National Highway Traffic Safety Administration over the last week. The company also recalled almost 2,800 vehicles for suspension that could increase the risk of crash, we reported on October 29. 

And so, Tesla slumps pre-market. That is, in all likelihood, at least until the options market opens. 

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