Tech

How Elon Musk’s tweets move Tesla’s share price

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Elon Musk, CEO of Tesla, went into hot water with regulators in 2018 for tweeting infamously about to take the private company to a nice round stock price of $ 420. His censorship did not stop his tweets.

In spite being fined $ 40 million, lost his Tesla presidency, and being ordered to launch tweets from Tesla lawyers, Musk continued to tweet things that would move his company’s share price without consulting with the company’s lawyer, according to I do not report from the Wall Street Journal.

On the evening of July 29, 2019, Musk tweeted on Tesla’s solar roof production, which sent the stock to about 3 percent at the end of the market on Monday. The Securities and Exchange Commission (SEC) told Tesla that the tweet should have been verified by Tesla’s lawyers since it was “production numbers or sales or delivery numbers,” according to records obtained by the Journal. . Tesla countered that Musk would not submit the tweet to the magazine because it was “entirely aspirational.”

However, Musk persists.

May 2020, Musk tweeted that “Tesla’s stock price is too high imo.” That day Tesla’s stock price closed 10 percent lower than the day before. The SEC said the tweet was subject to review since it concerned Tesla’s financial situation and said it was not because it was a “personal opinion”.

So far, the backlash and backlash between regulators and society has equated to nothing. “Tesla’s lawyers have argued against the SEC’s claims on the tweets, and the SEC has never returned to court to ask a judge to intervene,” the Journal wrote.

The problem is not whether Musk’s tweets violated securities laws, but whether they violated the SEC’s previous agreement with Musk, according to Tulane University business professor Ann Lipton, which specializes in security and corporate litigation.

“The potential remedy for the SEC would be to go to court and argue that Musk despises the violation of the previous agreement,” Lipton wrote to Recode. “They tried it once before and the judge seemed to think they were flyspecking [being overly particular]; she was not sympathetic. That’s why the SEC may be shy now. ”

“I may also be concerned about the general ownership of an establishment that limits a CEO’s public communication where there are no other allegations of falsehood or illegality,” Lipton added.

Many things influence a company’s stock price. However, the founder and CEO of a company tweeting significant information about the company can push the price higher than most.

And his own company isn’t the only price Musk is moving.

Lately Musk has been tweeting a lot about cryptocurrencies, in which Tesla is heavily invested. The billionaire’s tweets have has changed the prices of bitcoin and dogecoin, goods that they are not clearly regulated from the SEC or any other agency, so you’re less likely to have problems here.

Musk’s cryptographic tweets could scratch an itch for the world’s second-richest person, who seems to enjoy his power to move markets up or down.

It is also branching out into children’s actions. His son Tweet yesterday on “Baby Shark” he posted the stock price of Samsung Publishing, the viral creator of the YouTube song, up to 10 percent.

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