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SEC accused Ilona Mask of violating the ban on the publication of important data on Tesla in social networks





In August 2018, Musk wrote on Twitter about the possible withdrawal of Tesla from the exchange (we discussed the possible implementation of this plan). According to the US Securities and Exchange Commission (SEC), the businessman’s statement was false and misled investors. The Office filed for Mask in court.



As a result, the entrepreneur and the SEC concluded a pre-trial agreement. Now the Commission accuses Mask of violating it.

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What is the problem



To prevent legal proceedings, Mask and the SEC entered into a pre-trial agreement. Among its important points are: Mask leaving the post of chairman of the Tesla board of directors and paying them a $ 40 million fine. Tesla also introduced independent top managers to the board of directors and had to establish “additional control measures” over Mask's messages in social networks.



At the same time in mid-February, the businessman wrote on Twitter that Tesla plans to produce "about 500 thousand" cars in 2019.





Later, he clarified that he was talking about possible results at the end of the year, while the plans still had a figure of 400 thousand cars.



The SEC considered these statements a violation of the conditions of the pre-trial agreement, since such forecasts can directly affect the price of Tesla shares. Representatives of the department have already appealed to the court to issue an official ban on such comments for Mask.



The entrepreneur himself said that the figures he had announced were previously published in the quarterly earnings report. In addition, he previously stated that no one checks his tweets:



I had no problems with censorship after the court decision. Nobody reads messages before posting, the only thing that should be checked is tweets, which can affect the value of the shares.



[...]



Even if a tweet can affect the action, and no one will read it in advance - I have the right to a few mistakes. Nobody is perfect.


How do Mask and SEC relationships affect Tesla shares?



Ilon Mask and the Securities and Exchange Commission several times entered into a public confrontation during the past months.



The agency defended investors, many of whom were concerned about Mask’s plans to withdraw Tesla from the exchange and once again make it a private company. The pre-trial agreement concluded by the businessman and the SEC assumed that from now on Mask’s public statements about things and events that could affect the value of the company's shares would be pre-approved. This reassured investors, and Tesla's stock price has stabilized.



However, the recent worsening of relations between Mask and SEC provoked a decline in the share price, as investors are now again concerned about the future of the company.



According to analysts, despite the fact that Tesla's capitalization ($ 51 billion) is already higher than Ford ($ 34 billion) and is approaching General Motors ($ 56 billion) - the largest US automaker, the company is in a difficult situation. Tesla shares in 2019 fell by 10%, and over the past 12 months, the decline was 15%.



In such conditions, investors would prefer that Mask and his team focus on solving the problems of the company, rather than being distracted by the confrontation with government agencies. However, Ilona Mask has a different opinion:



Some people use their hair to express themselves. I use Twitter. Sometimes - to get revenge on the critics. Twitter is a theater of war, if someone got there, it immediately looks something like this: “Okay, you're in the arena. Go!".




Other materials on finance and stock market from ITI Capital :



Source: https://habr.com/ru/post/442088/

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