Elon Musk has reached a new settlement with the Securities and Exchange Commission (SEC), limiting how he can use Twitter and other social media. The Tesla (NASDAQ: TSLA) CEO has had several run-ins with the SEC in the last year, largely based around his sharing of company information over social media.
Musk will now need to gain approval from Tesla lawyers before posting about any of the following topics.
Tesla’s Financial Information
Musk will no longer be able to use Twitter to post information regarding Tesla’s finances. This includes earnings and guidance. All communications intended for shareholders will have to be presented through proper channels, such as quarterly earnings calls.
Potential Mergers and Acquisitions
The latest SEC settlement prevents Musk from publicizing any details about proposed or confirmed mergers and acquisitions. Musk is also forbidden from posting about tender offers and other ventures.
This will prevent incidents like Musk’s infamous “considering taking Tesla private at $420. Funding confirmed” tweet.
Unpublished Production and Delivery Numbers
In February, Musk posted that his company would make 500,000 cars in 2019. He later clarified that the real number would be significantly smaller.
His new settlement with the SEC prevents him from disclosing production and delivery numbers (both real and forecasted), unless they have been published through official communications channels.
New Lines of Business
Investors were surprised to learn in late 2018 that Musk was interested in working with Daimler (the parent company of Mercedes Benz) on an electric version of its Sprinter van.
The partial Twitter ban will prevent the CEO from posting anything about new lines of business, even if they are simply implied concepts.
Unpublished Legal and Regulatory Matters
In the past, Musk has used Twitter to post cryptic messages regarding ongoing legal and regulatory matters. He has even posted tweets aimed directly at the SEC. This activity is now forbidden by the latest settlement.
Musk Twitter Ban Could Benefit Tesla Stock
While most would agree that Musk is a visionary entrepreneur and innovator, his unsanctioned social media posts often detriment Tesla stock. The SEC’s move to limit his posts could benefit stock and allow Tesla to focus on its business, rather than fallout from Musk’s tweets.
Tesla stock has declined -29.68% year to date, despite the company growing and becoming a top electric car manufacturer. Investors who believe in the future of electric vehicles could see this stock as a bargain today.
You may be interested
Job Hiring is Picking Up as Employers and Consumers Gain ConfidenceLamont J - March 29, 2021
The recent government stimulus for small and medium-sized businesses, personal stimulus checks, and declining Coronavirus cases, are all great news…
Fed Could Maintain 0% Interest Rate Until 2024Adam R - March 26, 2021
The Federal Reserve is holding its target interest rate in a range of 0.00% - 0.25%, even while the economy…