Elon Musk’s controversial tweet may cost him losing his job as Tesla CEO as the car makers Board as well as the US Securities and Exchange Commission (SEC) might have taken into the notice of market value which has dropped by $14 billion in hours after the controversial tweet by him. After Musk’s tweet, shares of Tesla has gone down by 12% on Friday before closing down 10.3%.
On Friday, Musk tweeted, “Tesla stock price is too high IMO (in my opinion)”. Tesla’s stock got reduced by more than 10 per cent. Before the first tweet, Tesla’s market valuation was nearly $141 billion and it got reduced to $127 billion.
Musk and Tesla reached a settlement of fraud charges with the SEC ensued from a tweet by Musk in August 2018. The settlement comprised of $40 million in penalties, divided equally between the company and Musk, and the dismissal of Musk as chairman of the Tesla board.
In a statement by Steven Peikin, Co-Director of the SEC’s Enforcement Division, said, “As a result of the settlement, Elon Musk will no longer be Chairman of Tesla, Tesla’s board will adopt important reforms — including an obligation to oversee Musk’s communications with investors — and both will pay financial penalties”.
As per SEC’s complaint, the misleading tweets by Musk caused Tesla’s stock price to hike up by over six per cent on August 7 and resulted in noteworthy market disruption.
Prior to the first tweet, Tesla’s market valuation was nearly $141 billion b and it got reduced to around $127 billion.
One user replied to Musk: “Are you doing it because you need the cash or is this to protest the world burning down?”
Musk replied: “Don’t need the cash. Devoting myself to Mars and Earth. Possession just weighs you down”.
After the debacle, Musk is supposed to seek pre-approval, if his tweets include anything regarding the company’s securities, including his acquisition or disposition of shares, nonpublic legal or regulatory findings or decisions.
