Tesla shares sink as deliveries decline
Elon Musk and the SEC have two weeks to work out their differences over how the billionaire CEO posts Tesla Inc. news on social media, or a judge in New York said they’d hear from her.
The U.S. Securities and Exchange Commission claims Musk violated an October settlement with a Feb. 19 post on Twitter and wanted him found in contempt of court. U.S. District Judge Alison Nathan questioned the specifics of the deal and told the two sides to rework the language so there won’t be any ambiguity on what Musk is allowed to post and what he can’t.
Nathan said she has "serious concerns that whatever I decide here, the issue will not be finally resolved." If Musk and the SEC don’t resolve the dispute, Nathan could still find Musk in contempt.
"Take a deep breath, put your reasonableness pants on and work this out," Nathan told both sides.
Musk has been tangling with the SEC since he tweeted on Aug. 7 that he was considering taking the company private at US$420 and had the funding. The regulator sued him, saying the post was false.
Musk and Tesla each agreed to pay US$20 million and the CEO also agreed to have his social media posts overseen by essentially a twitter-sitter, for any information that might affect investors’ decisions. The SEC said he violated the pact when he tweeted that Tesla would make about half a million cars in 2019. He corrected that a few hours later with a tweet saying deliveries would only reach about 400,000.
Musk should have had those statements vetted under the terms of the settlement, the SEC said Thursday. Musk’s attorneys countered that the post wasn’t material and that the Tesla CEO has been complying with the accord.
“We have always felt that we should be able to work through any disagreements directly with the SEC, rather than prematurely rushing to court,” Musk said in a statement after the hearing. “That is exactly what Judge Nathan instructed.”
He said he was pleased with the judge’s decision.
Musk’s lawyers had argued in court filings that the CEO has curtailed his use of Twitter recently, a claim not supported by a review of his account which shows he’s tweeted more in March than any other month since June.
A reporter asked Musk outside court: "Do you think you can work this out with the SEC over the next two weeks?"
Musk paused, looked away for a moment, and answered, "Most likely."
As Musk walked down the courthouse steps, surrounded by reporters and photographers, several supporters shouted "We love you, Elon!"
Musk was then whisked away in a dark gray Tesla.