Tesla shares drop after Musk mocks SEC on Twitter
INTERNATIONAL - Shares of Tesla Inc fell as much as 4 percent on Friday, after Chief Executive Elon Musk stirred nerves about the settlement of his securities fraud lawsuit by mocking the US Securities and Exchange Commission on Twitter.
The tweet calling the SEC the “Shortseller Enrichment Commission” came just hours after a federal judge ordered Musk and the SEC to write a letter justifying a settlement which allows him to remain in charge at Tesla.
“Just want to [sic] that the Shortseller Enrichment Commission is doing incredible work,” Musk, a frequent critic of investors betting against the electric car company said in the tweet. “And the name change is so on point!”
The electric carmaker’s shares plunged last week after the SEC accused Musk, 47, of fraud over “false and misleading” tweets on Aug. 7 that promised to take Tesla private.
The lawsuit threatened to pull Tesla and Musk into a long drawn-out fight that could have undermined the company’s operations and ability to raise capital.
In the settlement that was announced over the weekend, Tesla and Musk instead agreed to pay $20 million each to the regulator while the billionaire - also a large Tesla shareholder - would step down as chairman but continue as CEO.
The settlement also provided for the appointment of a new chairman and directors to balance Musk’s influence at the company as well as moves to oversee his output on social media.
Musk also said in an email to employees at the weekend that Palo Alto, California-based Tesla was “very close to achieving profitability.”
Shares of the company were last down 2.4 percent at $275.07 before the bell.