Tesla Shares Drop After Musk Declares Stock Price Too High
Tesla CEO Elon Musk causes a sudden drop in the company's stock price by tweeting that it is "too high," raising questions about a prior agreement with the SEC.
Tesla CEO Elon Musk sends the company's stock into a temporary free fall by tweeting that the stock price is "too high" in his opinion. Shares drop nearly 12% in the half hour following this social media post, which is part of a rapid-fire series of messages covering everything from the U.S. National Anthem to his intention to sell all his possessions. The stock eventually rebounds slightly but still closes the day down 7.17%.
This unexpected social media outburst potentially violates a settlement agreement Musk reaches with the U.S. Securities and Exchange Commission last year. Under the terms of that specific agreement, Musk must seek pre-approval from a securities lawyer before tweeting about the company's financial condition, stock prices, or other major business milestones. Musk explicitly tells The Wall Street Journal that his tweets are not vetted in advance and that he is not joking.
The timing of this Twitter meltdown is particularly notable as it occurs during a live press conference for SpaceX, Musk's other major company. This latest clash with regulators echoes his previous legal troubles stemming from his infamous 2018 "funding secured" tweet regarding a potential private takeover of Tesla. The SEC declines to comment on whether this new tweet officially breaches the existing settlement, and Tesla does not respond to requests for a statement.