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'Despondent' Musk's Tesla resembles Lehman, Greenlight's Einhorn says

07 October 2018
'Despondent' Musk's Tesla resembles Lehman, Greenlight's Einhorn says

Shares in Tesla were down 4.4 per cent at $281.83 after Tesla CEO Elon Musk appeared to troll the SEC as the "Shortseller Enrichment Commission" on Twitter just days after settling fraud charges it brought against him.

The Tesla boss tweeted the "Shortseller Enrichment Commission", as he dubbed the Securities and Exchange Commission (SEC), was doing "incredible work".

The settlement reached with SEC not only cost Musk his position as a Chairman of the board, a fine of $20 million was also imposed on Tesla.

Musk's tweet came the same day that Judge Alison Nathan, a US District Court judge in NY, requested a joint letter explaining why she should approve the tentative settlement deal between Musk and the Securities and Exchange Commission. "And the name change is so on point!" he said on Twitter.

Additionally, Tesla's board must implement procedures for monitoring Musk's communications with investors, including on Twitter.

Tesla was not immediately available for comment.

Musk used his Twitter account to jab the Securities and Exchange Commission, the same agency that went after him for an August 7 tweet in which he declared he had secured financing for a Tesla buyout.

While some investors then came forward and confirmed that meetings had taken place in which Musk had raised the possibility of taking Tesla private, the message also caught the attention of SEC, which demanded an explanation.

The deal also calls for Tesla to pay a $20 million fine and vet any social media posts by Musk that could have a material impact on the company's finances.

The settlement still needs approval from the courts.

The settlement was announced on September 29, two days after Musk was charged. Because, as you all know, the price of a Tesla stock is said to include a sizeable Musk-premium, a value added to the price only because Musk, the pioneer that he is, is behind the project.

But, after seeing the consequences of it, I think he must be careful about his tweets.

The SEC declined to comment on Musk's tweet.

However, Musk had been acting erratically for months even before the take-private tweet and the subsequent interviews with the Times and Rogan.

Greenlight Capital's David Einhorn, who has been shorting Tesla for some time, said in a poison-pen letter Friday to investors that the eccentric billionaire is looking for a way out of his company to avoid the blame if it collapses.

On Thursday, the federal judge responsible for green-lighting the settlement asked the SEC and Musk to provide a joint statement explaining why the deal should be approved.