Musk's tweet scares investors and loses stock

The tweet of tech billionaire Elon Musk, taunting the SEC's SEC has shaken investor confidence in Tesla Inc., dropping the shares of the electric vehicle company to Friday by 7%.

The fall in Tesla far exceeded that of the overall market, with the Nasdaq Composite Index having lost just over 1%.

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Thursday, Tesla's CEO is making fun of the SEC for allegedly promoting short sellers, or investors who have bet against a company. This decision comes as the agency is finalizing a fraud settlement with the Silicon Valley contractor.

This regulation, which would require him to give up his role as president for three years and have his tweets monitored, must always be approved by a court. It follows from a previous tweet from Musk suggesting that he had secured funding to privatize the company, which the SEC said was wrong.

US District Judge Alison Nathan, who is overseeing the settlement, on Thursday urged the SEC and Musk to file a joint letter "explaining why the court had to approve the proposed consent judgment."

Musk tweeted Thursday, "The Shortseller Enrichment Commission is doing an incredible job. And the name change is so obvious! He has often opposed short sellers who are putting money on the fall of Tesla shares and have expressed doubts about the company's vehicle sales.

Tesla's share price returned to its level on September 28, just hours after the SEC accused Musk of fraud.

Although Musk's tweet against the SEC was "misguided," it did not violate the agency's rules and should not disrupt the settlement, said Thomas Gorman, a partner at the Dorsey & Whitney law firm. .

Thursday's tweet, "I will not be classifying important information about the company," he said, citing key facts for investors. "That said, I'm not sure it's a particularly wise thing to do."

A representative of the SEC declined to comment and a Tesla spokesperson did not respond to a request for comment.

On September 27, the SEC accused Musk of fraud for allegedly making "materially false and misleading" statements by tweeting that he had "secured funding" for an agreement to privatize Tesla.

Investors who bought Tesla shares on the basis of Musk's tweet were hurt by false information, according to the agency.

About 48 hours later, Musk, Tesla and the SEC reached an agreement forcing Musk to pay $ 20 million and withdraw from the presidency. But the settlement allowed him to stay as CEO.

But before the settlement is finalized, Musk and the SEC must submit a letter to the judge explaining why she should approve it. Nathan said the "usual practice" of the court is to ask for such a letter.

Friday, Musk – without getting discouraged – was on Twitter again. he tweeted Critic of Asset Manager BlackRock Inc., which, according to him, earns hundreds of millions of dollars by lending shares to resellers.

BlackRock spokeswoman, Melissa Garville, said the company "engages in securities lending in order to offer our fund investors the ability to generate returns superior to those that we have. they would otherwise have gotten ".