Elon Musk Taunts the SEC Amid Surge in Tesla Stock Price
(Bloomberg) -- Elon Musk provoked the U.S. Securities and Exchange Commission in the course of taking a victory lap on Twitter over Tesla Inc.'s surging share price.
The chief executive officer first taunted short sellers in a string of tweets, writing that the electric-car maker would “make fabulous short shorts in radiant red satin with gold trim.” That's an apparent reference to jokes he's repeatedly made about sending “short shorts” to investors who bet against Tesla's shares, such as hedge fund manager David Einhorn.
Musk, 49, then wrote Thursday that he would send shorts to the SEC, referring to the agency again as the “Shortseller Enrichment Commission.” He first used that phrase in October 2018 after the regulator sued him for securities fraud.
Musk then tweeted a cryptic but profane play on the agency's initials, prompting Ross Gerber, a fund manager who regularly engages with him on Twitter, to write back: “Dangerous.” Musk responded: “But sooo satisfying.”
Musk and the SEC have a combative history. The agency sued him in September 2018 over tweets he sent a month earlier claiming that he had secured funding to take Tesla private at $420 a share. As part of a settlement agreement, Musk was required to pay a $20 million fine, step down as Tesla's chairman for three years and have some of his tweets pre-approved by a company lawyer.
The SEC took Musk back to court last year after he failed to clear a tweet about Tesla's production with his in-house counsel. The two sides eventually agreed to amend the earlier settlement to add specific topics the billionaire can't tweet about or otherwise communicate in writing without advance approval.
Hours after a federal judge signed off on the amended deal in April 2019, then-SEC Commissioner Robert Jackson publicly criticized it, saying in a statement that Musk had not been sufficiently punished for failing to adhere to restrictions on his social media use.
In December 2018, Musk told “60 Minutes” that he did not respect the SEC. A spokesperson for the agency declined to comment on his latest tweets.
Tesla disclosed in February that the SEC sent the company a subpoena regarding “certain financial data and contracts” including “regular financing arrangements.” One analyst speculated the regulator may have been looking into how the company managed to build an assembly plant near Shanghai last year while spending just $1.3 billion on capital expenditures.
A better-than-expected quarterly deliveries report sent Tesla's shares surging 8% to a record close of $1,208.66 on Thursday. The stock has almost tripled this year.
©2020 Bloomberg L.P.
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