Why Was Elon Musk Smirking After His SEC Case Hearing?

Credit: The Street
Published on April 4, 2019 - Duration: 01:37s

Why Was Elon Musk Smirking After His SEC Case Hearing?

Elon Musk was smirking on his way out of the U.S. Southern District Court in downtown Manhattan, after Securities and Exchange Commission lawyers had made their case to a judge on why Musk's recent Twitter behavior was in violation of Musk's agreement with the SEC.

Why was Tesla's CEO looking so smug?

Nobody knows, but he sure does want people to think he's unflappable.

Tesla is Jim Cramer's Real Money Stock of the Day What Was the Court Hearing All About?

Musk has been in a tangle with the SEC ever since Aug.

2018, when he tweeted "funding secured" in reference to Tesla's ability to take the company private.

That turned out to be largely untrue, resulting in a fine from the SEC, Musk stepping down as Tesla's chairman for three years and an agreement in October that Musk would not tweet out information that could be material to Tesla's stock price without first consulting legal counsel.

In February, however, Musk tweeted that Tesla would make around 500,000 vehicles in 2019, later correcting that to say Tesla would be on a run rate to produce "probably around" 500,000 vehicles by the end of the year, with full-year deliveries totaling about 400,000.

Now the SEC is arguing Musk should be held in contempt and that his latest tweet about production numbers was a violation of his previous settlement with the SEC.

What Are the Arguments?

SEC lawyers told a judge Thursday that Musk's production tweet was material to Tesla's stock price, leading them to ask the judge to ask to hold Musk in contempt of court.

Musk's legal team, however, said the tweet was not clearly material information, arguing that the level of clarity in it was "ambiguous." In another big piece of news for Tesla, the company reported on Wednesday night that it delivered 63,000 cars in the first quarter, short of analysts estimates of 72,000.

As a result, the stock fell 8.23% to $267.78 a share on Thursday, although shares were down more earlier in the day.

Related.

Tesla Stock Loses Its Charge as Deliveries Disappoint Will I Have Enough Money to Retire?

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