Tesla CEO Elon Musk said in a Twitter post Friday that he thought the company’s share price was “too high”, a comment that not only caused the company’s share price to plummet immediately, but could also violate a deal he struck with the Securities and Exchange Commission last year.
In the half-hour after Musk’s announcement, Tesla’s shares plunged nearly 12 percent. He also posted several other Twitter messages, including the advocacy of “Freedom for People,” the lyrics of the American national anthem and the poet Dylan Thomas’s verses, and said it would sell all his possessions.
The Securities and Exchange Commission declined to comment on whether Musk’s comments violated the settlement, and Tesla has yet to comment.
Musk reached a settlement with the Securities and Exchange Commission a year ago that he was free to use Twitter without fear of violating an earlier court order, subject to certain restrictions. Under the agreement, Musk is free to post Twitter messages, in addition to content related to specific events or financial milestones. Under the agreement, filed in Manhattan federal court in April 2019, Musk must obtain approval from securities lawyers if he wants to post Twitter messages related to the above.
For example, if Musk wants to post Twitter messages related to company stock, such as buying or disposing of shares, non-public legal or regulatory findings or decisions, it needs to be approved in advance. In addition, other items that require prior approval include any information regarding the Company’s financial position or guidance, potential or proposed mergers, acquisitions or joint ventures, sales or shipment data, new or proposed new lines of business, and any event requiring filing with the U.S. Securities and Exchange Commission on Form 8-K.