On May 7th, Joshua Brown became a highway fatality. Unfortunately, people die in car accidents way too often, but there was an interesting twist about this accident. It happened in Brown’s Tesla Model S while driving on a Florida highway in autopilot mode. Elon Musk said Tesla immediately reported the accident to the National Highway Traffic Safety Administration pursuant to their established protocols. The NHTSA however, did not make an announcement about opening an investigation into the incident until the end of June.
Between the date of the accident and the announcement from NHTSA a week or so ago, Musk and Tesla sold $2 billion in stock at $215 per share. Those funds are scheduled for development funding of the Model 3 and moving the production forward faster. But there are those who are criticizing Musk for not disclosing the accident before selling those shares. The people at Fortune Magazine say, “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.”
Tesla’s PR people say it was not a material fact as proved by what happened with the share prices once the 4th of July holiday came to an end – Tuesday morning being the soonest shares were available after the announcement from the NHTSA. Initially, the stock prices dropped down to $206, but by the close of the market, they were at $216, higher than their closing the previous Friday at $212. Tesla may be right, if it had been a material fact, the stock would have stayed down or continued dropping.
Here’s the final kicker – Musk thought that the people at Fortune were trying to say the autopilot feature was not safe and responded strongly in an email stating, “Indeed, if anyone bothered to do the math (obviously, you did not) they would realize that of the over 1M auto deaths per year worldwide, approximately half a million people would have been saved if the Tesla autopilot was universally available. Please take 5 mins and do the bloody math before you write an article that misleads the public.”
Musk may be right, but from a PR standpoint, it’s usually better to filter statements to journalists until the heat of the moment has passed and you have a minute to assess how to get the point across without effectively calling the other person an idiot.The good news is, their stock is on the rise
David Firester specializes in intelligence analysis and is based in NY.