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On Saturday, Elon Musk from the Securities and Exchange Commission claiming that he had violated federal securities laws by tweeting that he had “funding secured” to take Tesla private. Now, days later, Musk has tweeted out a sarcastic message to the SEC:
Just want to that the Shortseller Enrichment Commission is doing incredible work. And the name change is so on point!
— Elon Musk () October 4, 2018
Musk has long waged a rhetorical war against shortsellers—investors who borrow shares of Tesla in order to profit if the price drops. Here he‘s suggesting that the agency—whose mission is to protect investors from CEO misconduct—is actually harming the value of Tesla‘s stock by enforcing securities laws against Musk and Tesla.
In June, that shorts “have about three weeks before their short position explodes”—presumably a prediction that Tesla‘s strong quarterly results would cause Tesla‘s stock to rise.
required Musk to step down as Tesla‘s chairman, appoint two new independent directors, and pay a $20 million fine. The deal also requires Tesla‘s board to “establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk‘s communications.” But according to Recode‘s Teddy Schleifer, that requirement , giving Musk a few more weeks of unfettered tweeting.
On Monday, Musk had another tweet that appeared to be mocking the SEC, though it wasn‘t nearly as pointed:
Naughty by Nature
— Elon Musk ()
The stock market did not seem thrilled about Musk‘s latest tweet today. After falling 4.4 percent during the regular trading session, Tesla‘s stock price fell by another two percent in the minutes after Musk tweeted.
The judge overseeing the case to write a joint memo justifying the settlement. It‘s due next week. Ordinarily, this would just be a formality, but Musk‘s tweet is certainly not going to help the process go more smoothly.