Sometimes fact is stranger than fiction for Tesla and its CEO, Elon Musk. The polarizing CEO of the World’s largest electric vehicle manufacturer is once again in trouble with the United States Securities and Exchange Commission after the billionaire tweeted out Tesla news without prior approval.
In case you haven’t been following, here’s a brief timeline of events that has led us to this strange reality in which Elon Musk can’t tweet without formal approval.
On August 7th, 2018 Elon tweeted that he had private funding ‘secured’ to take Tesla private. The now infamous tweet:
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
Days later reports surfaced that Tesla’s own board had no idea their CEO was considering such a move. Then came the news that Elon Musk may not have ever had funding ‘secured’ in the first place. By Mid-September rumors were swirling that the SEC would launch a criminal investigation into Elon’s tweets, which had greatly affected the price of Tesla’s stock.
Elon ultimately settled with the SEC and was forced to pay out $20 million to the SEC, and step down from his role as Chairman of the board. Of course, this being Elon Musk, he criticized the SEC mere weeks after accepting what amounted to a slap on the wrist.
Lastly, the settlement included a very clear requirement: Elon Musk would not be prohibited to Tweet anything related to Tesla without prior review by the company itself.
Elon Musk violated order prohibiting him from tweeting about Tesla without 3rd party review
Tesla made 0 cars in 2011, but will make around 500k in 2019
— Elon Musk (@elonmusk) February 20, 2019
Mr. Musk tweeted out that Tesla (NASDAQ:TSLA) would produce half a million vehicles in 2019, which could be viewed as data that would mean something to investors. And as I’m sure you’ve guessed, he did not submit the comment to the proper approvers to be vetted. 24 million people read the tweet.
In his defense, Elon believed that the tweet had been “appropriately vetted, pre-approved and publicly disseminated.”
Stephen Diamond is a professor of corporate governance at Santa Clara University thinks this is a “pretty unusual situation… all bets are off”. The professor said that the SEC could seek to bar Musk from the board, perhaps even remove him as CEO.
Elon just can’t seem to stay away from trouble, which is unfortunate as Tesla itself has been doing better and better in recent quarters. He’s probably in for another light punishment, but it wouldn’t be surprising if the SEC lashes out given all the disrespect he’s made public about the government body. Investors are surely worried as its a sure-fire bet the stock will tank if Elon is ousted.
I’ll digress for a wee second here. Despite all the headaches this has caused Tesla and its investors, Elon’s Twitter madness has really brought to light how important public comments are. Huge effects on the world-at-large can be expounded with simple comments on a platform such as Twitter.
It strikes me as odd that the President of the United States has fewer filters and censors (read: none at all) on his Twitter account than a private citizen. While its true that the CEO of a publicly traded company can instantly affect the trading price of his or her company’s stock with public remarks, the ‘leader of the free-world’ can certainly affect entire markets with a single Tweet as well, yet no censorship of his Tweets are ever mentioned. How many times has Mr. Trump tweeted about the US-China trade ware and markets bounced up or down?
What a strange world we live in.
The post Elon Musk Is In Trouble With The SEC… Yet Again by Shaun Williams appeared first on Wccftech.
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