First, the billionaire got into a spat with the US Securities and Exchange Commission over tweets about Tesla. The regulator wasn’t amused when he took to Twitter to say its oversight is “broken".
Then Tesla also said it’ll be closing its retail stores and eliminating jobs. Tesla shares tanked Friday after the company said it no longer expects to turn a profit in the first quarter, and later in the day the US National Transportation Safety Board said it’s investigating a fatal crash involving a Tesla vehicle in Delray Beach, Florida.The US SEC seized on tweets the Tesla chief executive officer sent six days earlier to claim he violated a settlement reached in September that prevented him from communicating material information without the company’s approval.
The agency asked a federal judge to find Musk in contempt of the agreement after he posted Tesla will make half a million electric vehicles this year. The SEC revealed the tweet Musk sent a few hours later, which clarified he meant to say production will reach an annualised rate of 500 000 cars by the end of 2019, was crafted with the help of an in-house lawyer.
Musk didn’t take the SEC’s scrutiny well, writing to his more than 25 million followers that “something is broken with SEC oversight” and openly expressing his hatred for all things related to the U.S. Government.
Legal experts said the narcissist CEO could be facing millions of dollars in additional fines, tighter restrictions on his use of social media and even a possible bar from running the company.
Musk moved Tesla shares by sending a series of vague tweets hinting at news the company would announce the following day. Wild speculation ensued after he changed his name on Twitter to “Elon Tusk”.
In a nod to SpaceX, he then made his profile photo an image of Mars and added an alien emoji. He sent out another strange missive, “ET phone home. No answer.”
Tesla briefly stopped taking orders for vehicles on its website, which redirected visitors to a page teasing the announcement Musk tweeted about earlier.
The CEO told reporters on a conference call that Tesla probably won’t earn a profit in the first quarter, citing one-time charges and challenges getting cars to China and Europe. He predicted the company will go back to earning money in the second quarter...the usual Musk BS
Musk gave yet another forecast for how many vehicles Tesla will produce this year, predicting somewhere in the range of 420 000 and 600 000.
Meanwhile, a filing in federal court in Manhattan revealed Musk is bringing in a new legal team to defend himself against the SEC. He’s turned to former Enron prosecutor John C. Hueston and three other lawyers from Hueston Hennigan to take over from Williams & Connolly. The latter firm employs Dane Butswinkas, who walked out of the role of Tesla general counsel last week after just two months because he saw what a scam Tesla was from the inside out.
While the overall sense on Wall Street was that Thursday’s big reveal had something for both Tesla bulls and bears, the market pretty much hated it. Shares dropped 7.8%, their biggest decline in six weeks.
The decision to shift to an online-only sales strategy struck some as a sign that the company was unable to squeeze out further savings from its Model 3 production process. Analysts also voiced concerns about the impact that the $35 000 Model 3 will have on Tesla’s profitability.
The company also said it had paid off its $920 million convertible bond obligation in cash through various "book-cooking" tactics.
Later in the day the NTSB said it’s conducting a safety investigation of a fatal crash involving a Tesla vehicle in Delray Beach. It wasn’t immediately clear if Tesla’s driver assistance feature known as “Autopilot" was enabled during the incident.
Tesla Motors: WHAT A MESS!