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It started out innocently enough as an entertaining way to post videos from posting popular music, snippets from TV shows, how-to demos, personal tirades, stupid human tricks, and a plethora of other item, both socially redeeming and some that indicate the need for social redemption. Yesterday we saw an example of how powerful this social site may have become when it actually had an impact on the share price of Tesla Motors (NASDAQ:TSLA).
Background
Tesla Motors is the first company in the world to truly be mass producing an electric car that has both power and range. See the ADVFN story from 08 August 2013, “Tesla Redefines Everything.” On 12 October 2012, almost exactly one year ago, ADVFN cited “Top Insider Purchases: GEL, TSLA.” When Ed Liston penned that article, Tesla shares were trading at $28.51. By the time I wrote the 08 August story, Tesla was trading at 141.89. By 13 September, Tesla’s share price had reached 195.15.
Tesla’s cars are selling like hotcakes. The company is producing them as rapidly as they can, but for Tesla to succeed, they must also build an infrastructure to support the “fuel” demands of the vehicles. It appears that they are doing a very good job at that. They understand that it is useless to build a car without having adequate and accessible charging centers.
Recently, Tesla has moved into the international market, introducing its S model in Norway. That’s the kind of news that is interesting, but the news that is astounding is that in the month of September, Tesla’s second month in Norway, it was the Number 1 selling car in the country.
The Impact of YouTube
YouTube posted a video of a Tesla sedan that had caught on fire in Seattle, Washington. The sheer sensationalism of the video sent investors scrambling in fear that their investment was in danger. Yesterday the Tesla share price fell 6% to close at 180.95 and it continued to fall another 3% in pre-market trading this morning. The NASDAQ opened just a few minutes ago as I am writing this article, and it appears that Tesla may recover as some common sense may yet prevail. Tesla opened at 173.83, but is currently fighting its way back through the 176-177 range.
The singular fire, by the way, was not self-initiated. It was cause by the car hitting some major debris in the roadway. It could have happened to any vehicle.
The Point
The point is that the whole financial world could be in danger if investor knee-jerk reactions become even worse if they are affected by dependence on social media. A singular incident where a company’s product is involved, especially if the product is not the cause of said incident, should not drive investors away and share prices down.
The Problem
The problem is what to do about it. Right now I do not have an answer, except to use my platform to beg people to THINK. I realize that may be too much to ask of some, but, perhaps there will be enough who do to offset those who do not.
Tesla’s share price has now recovered to 179.23.
