Elon Musk has found himself on the wrong side of the SEC again. The outspoken CEO of Tesla (NASDAQ: TSLA) may find himself in contempt of court following a recent tweet.
Musk posted on Tuesday last week, telling his followers that “Tesla made 0 cars in 2011, but will make around 500k in 2019.” He followed up with clarification in a second tweet, saying “Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k.”
SEC Unhappy About Unapproved Tweet
Musk’s tweet gained the attention of the Securities and Exchange Commission.
The Commission filed a case with a Manhattan court on Monday, asking that Elon Musk be held in contempt for breaching an earlier agreement. In court papers, the SEC stated that “He once again published inaccurate and material information about Tesla to his over 24 million Twitter followers, including members of the press, and made this inaccurate information available to anyone with internet access.”
The SEC settled a fraud investigation with Musk last year, after the CEO made inaccurate claims about private funding and a stock buyout. The settlement requires that Musk clears all Tesla-related tweets with the company board. Both Musk and Tesla confirmed that the latest tweet had not been through an approval process.
The Commission believes that “Musk has not made a diligent or good faith effort to comply with the provision of the court’s final judgement requiring pre-approval of his written communications about Tesla.”
Stock Fell Following SEC Filing
Tesla finished the regular session on Monday up 1.38%. News of the SEC filing brought the stock price down by -3.04% in after-hours trading.
Despite a market rally this year, Tesla stock has not recovered its losses from 2018. The stock is down -10.23% year to date, and -14.88% over the last 12 months.
Tesla still looks strong as a long-term pick, thanks to its dominance in the American electric vehicle market. Investors, however, want to see higher production numbers and less public blunders from Musk. This latest tweet is a reminder of Musk’s often impulsive style of public communication.
Stock prices may continue to stay down while the Company and Musk resolve this latest issue with the SEC.
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