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.
Undisclosed
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.
PR Mistake
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 riseDavid Firester specializes in intelligence analysis and is based in NY.
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