Automotive

SEC Subpoenas Tesla Again

Loose lips sink ships, but careless Tweets make the government mad at you.
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SEC Subpoenas Tesla Again

Elon Musk, CEO of Tesla Inc, tweeted in August of 2018 that he was "Considering taking Tesla private at $420." And commenting that the funding was "secured". The tweet caused a sharp 11% rise for Tesla shares over the rest of the day. A subpoena issued Nov. 16 of the same year alleged Musk committed security fraud by saying he had secured funding, while Musk maintains his communication was "entirely truthful."

History Lesson: This is not the first time Musk's Twitter has had an impact on the market. Just 10 days before the November subpoena, Musk opened a Twitter poll asking if he should sell 10% of his Tesla stake and the carmaker's shares plunged 16% over the following two trading days.

The SEC is not alone in taking issue with Elon's carelessness. Shareholders have claimed in a class-action lawsuit that Musk's tweet cost them billions of dollars in losses. At this time they are seeking a judge's ruling ahead of a May 31 trial.

Telling it like it is — Loose lips sink ships, but careless Tweets make the government mad at you.

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