Shares of Tesla witnessed fell 4.3% yesterday after the Securities and Exchange Commission (SEC) asked a judge to hold the Company’s CEO, Elon Musk, in contempt of court for violating a settlement deal. Last fall, the company went into conflict with the SEC over the CEO’s aborted bid to take the company private. Musk remained at the helm of the company but relinquishing his chairman title and got slapped with a $20 million fine. As part of the settlement, Musk was supposed to get pre-approval for future tweets.
But apparently Musk violated this deal when he announced inaccurate information regarding its production numbers. The tweet says that Tesla would make “around” 500,000 vehicles this year which meant a production rate of 10,000 cars per week.
Musk did not seek prior approval of the SEC before publishing his tweet. So the information, deemed faulty by SEC, has now reached over 24 million people who follow Musk on Twitter.
However, Musk defended his position with a follow up tweet saying that Tesla earnings which are in knowledge of SEC, clearly states 350k to 500k. He is yet to make that statement formal and has been given a March 11 deadline to defend his position.