Elon Musk, the founder and chief executive officer of Tesla and SpaceX, has taken to Twitter in a string of tweets that places him in an ambiguous situation with the Securities Exchange Commission.
On May 1, Musk tweeted “Tesla stock price is too high imo” which sent Tesla’s stock price down nearly 12% in the half-hour after. Tesla shares then rebounded later that day to close at US$701.32 a share, a 7.17% decline from the opening price. The predicted market capitalization loss with this share price tumble is US$13 billion.
This tweet followed several others from the billionaire, including one stating that Musk would sell off his possessions as well as another one calling for freedom.
This comes almost exactly a year after a settlement agreement was reached with the SEC after the commission charged the CEO with securities fraud. At the center of the complaint was an August 7, 2018 tweet that announced that Musk had “funding secured” for a private takeover of the company at US$420 per share.
As part of the settlement, which included a US$20 million fine (without the admission of wrongdoing), Musk had to agree to step down as Tesla chairman for a minimum of three years and Tesla was also required to internally set up ways to monitor Musk’s statements about the company to the public.
Musk can now tweet as he wishes except when it’s about certain events or financial milestones. In those cases, Musk must seek preapproval from a securities lawyer. Preapproval for much of the company’s affairs also needs to be vetted prior.
Both Tesla and the SEC declined to comment.
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