Just before Musk's tweet went out, Tesla's shares were hovering at a little over $761. Minutes after Musk's tweet was published, shares plummeted to a low of $686.93, shaving off billions of dollars from the company's market cap.
That message was part of a series of bizarre tweets from Musk's account, including lyrics to the Star Spangled Banner and promises to sell his homes.
"I am selling almost all physical possessions," Musk tweeted. "Will own no house."
While some are speculating that his account was hacked, the tweets remain on the platform, which may mean Musk himself made the comments. But even for Musk, who has been increasingly erratic in his commentary of late, the tweets seem off.
Whatever the case, Musk's tweets offer a cautionary tale for every business owner. Yes, Musk's broad appeal and public-facing Twitter account are good for his business. Having an outspoken CEO reduces Tesla's marketing spend and helps the company earn billions of dollars in free advertising every time he taps out a message. Or two. Or four.
Then there's the blowback. As important and beneficial Musk's tweets may sometimes be, they can also be damaging, as evidenced by Friday's tweets. A single message that seemed to have no value to the company whatsoever actually sent stocks plunging and caused shareholders to lose money. And, equally important, trust in Musk.
It's a problem Musk has faced in the past, as when he promised to have secured funding to take Tesla private. That never panned out and he found himself sued by the SEC because of it.
If Musk indeed tweeted that Tesla's stock price is too high, it's unclear how the SEC might respond. If it turns out Musk's account was hacked, Tesla will need to address it soon or face even more losses.
For the average business owner, there needs to be a proper balance between telling-it-like-is and talking-out-of-turn. There is undoubtedly value in maintaining an active, public-facing profile for CEOs, but that effort needs to be carefully monitored. One false step can have a profound impact on the company, whether the CEO has been hacked or not.
For most companies, embracing the power of social media for publicity is a smart move, but the CEO needs to be kept in check so they don't say things they shouldn't. Most importantly, keep their Twitter accounts secure -- a hack can be extremely damaging.