We reported yesterday that The United States Securities and Exchange Commission was looking to hold Tesla CEO Elon Musk in contempt for breaching a court ordered settlement that Musk slithered away with as a result of his fraudulent tweet from last summer claiming he had funding secured for the buyout of Tesla at $420 per share.
If you thought that as a result of this contempt claim that maybe – just maybe – this time would be different and Musk would have learned by now not to pick a fight with regulators, you were dead wrong.
After the SEC alleged that a recent Tweet from February 19 was in violation of Musk's court order to have his social media posts pre-approved by a lawyer, Musk responded to the SEC action yesterday by calling the agency "embarrassing".
Despite admitting that he didn't have his Tweet pre-approved and noting that he switched from giving guidance with a 150k vehicle margin of error (350k to 500k), to a closely definitive "around 500k", Musk still believes he is being wrongfully persecuted, and as a result he is doubling (and tripling) down as he now is hell-bent on trying to make fools out of the SEC.
That Tweet was followed up this morning by Musk claiming “Something is broken with SEC oversight” in response to a user’s tweet sympathizing with Musk.
All the while, Tesla stock continues to tumble. The stock is trading down 3% in the Tuesday pre-market session.
Naturally, the Twitter community was vocal in its response:
Is it any wonder Dane Butswinkas quit as $TSLA's General Counsel? Every capable defense absolutely hates a client who is (a) a know-it-all, (b) arrogant, and (c) defies the legal advice. Best to fire the client & move on. The latest idiocy from the idiot here. pic.twitter.com/gNEtraTa2o— Polixenes (@Polixenes13) February 26, 2019
If 10b-5 means nothing for Elon Musk, it means nothing for everybody. The SEC knows this. You don't get to make commitments to a judge, then go on 60 minutes and predict you will shit on those commitments, and then shit on those commitments without consequence. $TSLA $TSLAQ— TeslaCharts (@TeslaCharts) February 26, 2019
To me, feels like the chance is getting greater that Musk simply wants out of the CEO role and he strategically sees the SEC removing him as a way to get it done without making his sycophants, loyalists and shareholders put the blame where it squarely belongs: on him. $TSLA— Quoth the Raven (@QTRResearch) February 26, 2019
Contempt of court aside, the ongoing barrage of tweets and Musk's attitude continues to ridicule the SEC for settling with him to begin with. Whether or not the SEC will find it in themselves to take decisive action and address the very little integrity that is left in the capital markets remains to be seen.