A feud has been reignited.
Tesla CEO Elon Musk has received another subpoena from the US Securities and Exchange Commission (SEC) over his 2018 tweet about possibly taking the automaker private. Tesla has acknowledged it's received the latest subpoena over a tweet Musk wrote last November. The subpoena was issued the same month. This time, Musk asked his millions of Twitter followers if he should sell 10 percent of his stake in the company. Harmless, right? Perhaps, but it also resulted in a stock selloff.
The SEC is paying close attention to what Musk writes on the social media platform ever since August 7, 2018 when he claimed Tesla had received sufficient funding to go private again at $420 a share.
Tesla issued its IPO back in 2010 and is now the world's most valuable automaker. The Model 3 remains its top-seller. At the time, Musk claimed to have secured the necessary funding and would buy out shareholders if they so desired. These tweets were published mid-day while trading was still happening, resulting in the automaker's stock price increasing. The SEC then began an investigation and later reached an agreement with Musk/Tesla. But the fighting between the sides soon flared up again.
The SEC initially wanted Musk to be fined and found in contempt for violating a settlement agreement over his tweets when he tweeted about Tesla's production outlook, specifically writing "around" 500,000 Model 3s would be built that year, without getting SEC approval first.
Another agreement was reached in April 2019 between the sides regarding what Musk can and cannot tweet about without a lawyer reading it over first. Here's where the latest debacle begins: only 10 days before the November subpoena, Musk released a Twitter poll asking whether he should sell that 10 percent stake. This resulted in Tesla shares dropping 16 percent during the next two days of trading. It seems the SEC red-flagged that tweet, leading to the latest subpoena.
Not surprisingly, Tesla shares have already dropped somewhat (by 1.4 percent) as of midday Monday. As usual, Tesla has no comment on the matter because it lacks a media relations department.
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