Tesla (TSLA) stock went down 5% last night after investors panicked over the SEC trying to hold Elon Musk in contempt of his settlement deal over a tweet.
Now, the automakers stock has erased the losses today as it appears that the SEC could be overreaching by going after Musk for the tweet.
Yesterday, the SEC asked a judge to hold Musk in contempt for violating one of the terms of the settlement of SEC’s complaint against Musk over his “funding secured” comment about his attempt to take Tesla private.
The SEC settlement requires that Musk gets pre-approval for tweets that “reasonably could contain material information” that could move the stock.
Elon Musk TSLA Tweets
Last week, Musk tweeted last week that Tesla will make 500,000 cars in 2019 before correcting himself saying that it will be the production rate at the end of the year.
The SEC thinks that the tweet violates the settlement even though Musk made similar comments about Tesla’s Model 3 production during the last earnings call a few weeks prior:
SEC forgot to read Tesla earnings transcript, which clearly states 350k to 500k. How embarrassing … 🤗
— Elon Musk (@elonmusk) February 26, 2019
After the SEC filing to hold Musk in contempt, U.S. District Judge Alison Nathan has now asked Musk to file a brief to make his case that it doesn’t constitute a violation of his settlement by March 11.
Tesla’s CEO has been tweeting that there’s “something broken” with the SEC for coming after him:
Exactly. This has now happened several times. Something is broken with SEC oversight.
— Elon Musk (@elonmusk) February 26, 2019
Musk previously said that he has “no respect” for the SEC and he alluded on several occasions that he believes the agency is working to help the shorts betting against Tesla.
Electrek’s Take
Like I wrote yesterday, this is stupid.
I think Musk has a strong case that the SEC is overreaching here even though I admit that there’s a difference between a guidance of 350,000 to 500,000 units and simply 500,000 units.
That said, even if there’s a difference, he corrected it quickly and it’s simply not a reason for a federal agency tasked to stop market manipulation to go after him in court.
The stock didn’t move based on Musk’s tweet and it moved a lot on the announcement that the SEC was going after him. Maybe they should investigate themselves?
But seriously, this is so dumb. Now it’s obvious why Elon has no respect for the SEC.
There are so many obvious market manipulation and pump-and-dump schemes out there and instead, they decide to go after Tesla and Elon for some tweets.
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