Tesla Motors (TSLA - Get Report) late Wednesday fired back at reports that questioned the timeliness of the company's disclosure of a fatality in one of its vehicles, calling the accusations "fundamentally incorrect," while CEO Elon Musk took to Twitter to accuse Fortune of malfeasance.
Fortune ran a piece Tuesday questioning whether Tesla should have made public details of an early-May Florida accident, which appears to have involved the company's much-hyped autopilot technology, before raising more than $1.4 billion in an June secondary offering. The magazine in a follow-up piece notes that Tesla itself in regulatory filings refers to the potential for a single autopilot incident to be material to "our brand, business, prospects, and operating results."
Tesla in a blog post response late Wednesday said that the language in the filings refers to potential product liability claims, which it says "is just stating the obvious." The company argues that it was not a valid reason to disclose prior to the secondary offering because "neither at the time of this SEC filing, nor in the several weeks to date, has anyone brought a product liability claim against Tesla relating to the crash in Florida."
The automaker argues that Fortune made false assumptions in declaring that the accident was caused by autopilot, which is still under investigation, and believing that a single incident was material. Tesla repeated arguments made previously of the fact that the company's shares closed up the day after word of the accident became public is proof that investors did not find the incident to be material.
"The bottom line is that Fortune jumped the gun on a story before they had the facts," Tesla wrote. "They then sought wrongly to defend that position by plucking boilerplate language from SEC filings that have no bearing on what happened, while failing to correct or acknowledge their original omissions and errors."
Tesla CEO Elon Musk went a step further Wednesday night, retweeting an Electrek article defending the company in part, by noting that Fortune has previously published sponsored articles paid for by conservative activists Charles and David Koch criticizing tax breaks for electric vehicles, with Musk highlighting the words "sponsored articles."
Fortune is far from alone in suggesting that Tesla should have disclosed the accident prior to the offering. A number of securities lawyers quoted in the days since the article have said they would have advised disclosure. Tesla seemingly is both arguing that the investigation into the incident is incomplete and stating that since there has been no litigation to date, there is no reason for concern.
More worrisome is that the bigger-picture concern is seemingly lost in this back and forth. While Tesla makes it clear to drivers its autopilot feature is merely an aid and not fully autonomous driving, Musk, along with Tesla fans and some in the media, have marveled at the technology. For a company whose success is derived, in part, due to the perception it offers superior gadgetry, any bad publicity about Tesla's advanced technology could have an oversize impact on sales compared to a more traditional automaker.
It is also unclear whether the Florida crash was an isolated incident, or how other incidents could further impact the brand. Reports surfaced Wednesday about a National Highway Traffic Safety Administration inquiry into a Tesla Model X SUV crash in Pennsylvania in which a driver claims the autopilot feature was activated.
And while it is understandable that the company and its CEO would want to defend themselves from what they see as false accusations, shareholders might be best served by Tesla devoting its energy to endeavors other than picking fights with Fortune and Carol Loomis, the 87-year-old business journalism pioneer who penned the initial piece.
Tesla and Musk face a challenging next few quarters. The company missed delivery expectations for the second quarter and now must produce and deliver 50,000 vehicles -- as many as it delivered in all of 2015 -- in the second half, just to hit its internal 2016 expectations. Musk has challenged the automaker to boost production to 500,000 annual units by 2018 and 1 million units by 2020, a ramp that would challenge even a well-capitalized veteran automaker and seems borderline impossible for what remains a relatively thinly capitalized newcomer.
Meanwhile Tesla is also attempting to buy money-losing SolarCity (SCTY) , another Musk-affiliated company, in a deal priced at $2.8 billion that would add stress to the acquirer's balance sheet, while finishing work on its Gigafactory battery-production center, growing its home-storage-battery business, and building out its global charger and retail network.
There's enough going on at Tesla that the company need not add to its distractions. And there are plenty of would-be buyers for its upcoming Model 3 if it can get it into production as planned. If Tesla is correct and Fortune is wrong in claiming insufficient disclosure, the automaker has nothing to worry about.
For Musk, just like for the rest of us, sometimes the best bet is to ignore, and not respond, on social media.