Home >Companies >News >Elon Musk may lose his job as Tesla CEO because of this tweet. Read why
Tesla Inc CEO Elon Musk (REUTERS)
Tesla Inc CEO Elon Musk (REUTERS)

Elon Musk may lose his job as Tesla CEO because of this tweet. Read why

  • The tweet saying that Tesla stock was 'too high' also knocked $3 billion off Musk's own stake in the electric car-maker
  • His earlier notorious tweet in August 2018 when he posted about Tesla 'going private, funding secured' at $420 a share cost him his role as Chairman

SAN FRANCISCO : Elon Musk may lose his job as Tesla CEO as the car makers Board as well as the US Securities and Exchange Commission (SEC) must have taken into account his bizarre tweet that left Tesla's market value go down by $14 billion in hours. Shares of Tesla dropped as much as 12% Friday before closing down 10.3% after Musk's tweet.

What did Elon Musk say?

Musk had reported strong quarter numbers which sent shares higher. Tesla stock was trading at 760.23 just before Musk tweeted and then fell to a session low of 717.64, before falling even more.

On Friday, Musk stirred the controversy by tweeting that "Tesla stock price is too high imo (in my opinion)".

The tweet saying that Tesla stock was "too high" also knocked $3 billion off Musk's own stake in the electric car-maker.

Elon Musk's track record

His earlier notorious tweet in August 2018 when he posted about Tesla "going private, funding secured" at $420 a share cost him his role as Chairman.

The August 2018 tweet resulted in Musk and Tesla reaching a settlement of fraud charges with the SEC. The settlement included $40 million in penalties, split equally between the company and Musk, and the removal of Musk as chairman of the Tesla board.

"As a result of the settlement, Elon Musk will no longer be Chairman of Tesla, Tesla's board will adopt important reforms -- including an obligation to oversee Musk's communications with investors -- and both will pay financial penalties," Steven Peikin, Co-Director of the SEC's Enforcement Division, said in a statement.

According to the SEC's complaint, Musk's misleading tweets caused Tesla's stock price to jump by over six percent on August 7, and led to significant market disruption.

Tesla's market valuation was worth around $141 billion before the first tweet and it nosedived to nearly $127 billion.

One user replied to Musk: "Are you doing it because you need the cash or is this to protest the world burning down?"

Musk replied: "Don't need the cash. Devoting myself to Mars and Earth. Possession just weigh you down".

What's the law?

Musk is supposed to seek pre-approval if his tweets include anything regarding the company's securities, including his acquisition or disposition of shares, nonpublic legal or regulatory findings or decisions.

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