SEC wants Elon Musk to be held in contempt of court for allegedly violating December agreement
Tesla CEO Elon Musk lashed out at the Securities and Exchange Commission on Tuesday, one day after the agency asked a judge to hold him in contempt for allegedly violating the terms of a settlement made last year.
"Something is broken with SEC oversight," Musk tweeted.
The SEC's latest complaint said a Feb. 19 tweet by Musk about Tesla production was inaccurate.
At first, Musk had said Tesla would make "around" 500,000 vehicles in 2019, but then revised the tweet hours later.
"Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week," he said. "Deliveries for year still estimated to be about 400k."
After reports surfaced that the agency was seeking an injunction against him, Musk said Monday night that he had already mentioned these numbers in an earnings call.
"SEC forgot to read Tesla earnings transcript, which clearly states 350k to 500k," Musk said. "How embarrassing …"
Shares of Tesla were down nearly 2.5 percent in premarket trading Tuesday. They had fallen by as much as 5 percent on Monday night.
Tesla's share price has given the electric car maker a $51 billion market value, which is almost as high as the $56 billion market value of General Motors, the largest U.S. automaker, and larger than Ford's $34 billion market capitalization.
But Tesla shares have fallen more than 10 percent this year and 15 percent over the last 12 months.
Musk and the SEC have battled a number of times over the last several months. The two parties settled a dispute in October over some tweets Musk had made earlier in 2018 saying he was considering taking Tesla private and that he had already secured the funding. One of the conditions of that deal is that someone is required to oversee and approve anything Musk intends to say to the public about the company.
Investors had hoped that the settlement would allow Tesla to put the whole affair behind it and focus on its ambitious plans for ramping production, building new factories and developing new vehicles.
"With Tesla/Musk settling with the SEC in October this black cloud was in the rear view mirror for the company (and investors) and now this latest tweet (which most investors shrugged off at the time) represents a wild card that could potentially bring this tornado of uncertainty back into the Tesla story until resolved," Wedbush analyst Dan Ives said in a note sent Tuesday morning. "At this point we are more concerned around this issue being another distraction for Musk & Co. as the company navigates one of its most challenging periods in its history and certainty did not need this news."
Also concerning is the continued turnover in the company. Most recently, general counsel Dane Butswinkas left the company one day after Musk tweeted his 2019 projections for vehicle production. Butswinkas had only been on the job for two months.
Chief Financial Officer Deepak Ahuja announced his retirement when Tesla reported fourth-quarter earnings in January.
"Certainly, we don't like to see the turnover that we've seen with senior management with Deepak Ahuja leaving and the general counsel," Oppenheimer analyst Colin Rusch said Tuesday on CNBC's "Squawk Box." "That is not a great sign for the stability of the organization. We do think that there's enough management depth to keep this thing going, and certainly a big enough window in terms of the competitive environment for them to continue to take share of the market. But the volatility in the staff and the news flow is certainly a concern for us."