Tesla CEO Elon Musk and the SEC Ask for More Time to Reach Deal Over Musk's Use of Twitter

Tesla CEO Elon Musk and the SEC Ask for More Time to Reach Deal Over Musk's Use of Twitter

Author: FutureCar Staff    

(Reuters) - Tesla CEO Elon Musk and the U.S. Securities and Exchange Commission (SEC) on Thursday sought a second delay and requested to provide the court another joint submission on or before April 30, indicating whether they have reached an agreement to settle a dispute over Musk's use of Twitter, both parties said in a court filing.

In Feb, the SEC sought to have Musk found in contempt of a fraud settlement last year after the CEO tweeted details about Tesla production numbers that were not vetted by the electric vehicle company's attorneys.

U.S. District Court Judge Alison Nathan in Manhattan ordered Musk and the SEC to try to resolve the dispute on their own. The parties have already requested one extension.

The SEC sued Musk last year for making fraudulent statements after he tweeted on Aug. 7 that he had "funding secured" to take Tesla private at $420 per share. He wrote that funding for the move was already secured, when if fact is wasn't.

The parties later settled and Musk agreed to step down as chairman and have the company's lawyers pre-approve any written communications, including social media posts, with material information about the company. Musk's lawyers have argued that his February tweet did not contain new information that was material to investors.

The surprising tweet from Musk last August about taking Tesla private boosted Tesla's share price to $370 the following day. The $420 target price would have increased Tesla's valuation to $70 billion, making it the most valuable U.S. automaker.

One month later on Sept 7, share fell to $266.24.

Musk attempted to explain his claim a week later. He wrote that the Saudi Arabia sovereign wealth fund has approached him multiple times over the past two years about taking Tesla private. Musk said that they held several additional meetings with him over the next year to reiterate this interest and to try to move forward on a deal.

Private companies are not required to publicly disclose financial information, while public companies are required by the SEC to file an annual report documenting their performance in detail.

Tesla first went public in June of 2010 on the Nasdaq exchange. The company offered 13.3 million shares at $17 each. Since then, Tesla company launched its first electric car, the Model S, in June 2012. Tesla followed it the Model X SUV, and last summer began building its first mass-market car—the Model 3.

Tesla share were down 4% today to $247.69, the lowest price since March 2017 amid concerns about slowing demand for its vehicles.

FutureCar Staff
FutureCar Staff
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