What happened
Shares of Tesla (TSLA 1.85%) were slammed on Friday, falling as much as 6.8%. By 1:05 p.m. EDT, the electric-car company's stock was down 6.7%.
The stock's decline follows a series of tweets from CEO Elon Musk on Thursday night. One tweet mocked the Securities and Exchange Commission, just days after Musk and Tesla agreed to settle with the agency.
Image source: Tesla.
So what
In a tweet Thursday, Musk congratulated the "Shortseller Enrichment Commission" for its "incredible work," noting its "name change is so on point!" In another tweet, Musk also criticized short-sellers, saying, "Short-sellers are value destroyers. Should definitely be illegal."
Another reason for Tesla's decline on Friday is likely hedge fund manager David Einhorn's criticism of the automaker in his quarterly letter to investors. Relating Musk and Tesla to the Lehman Brothers' downfall during the recession, Einhorn said, Musk's "ever more aggressive deceptions" are "about to catch up to TSLA."
Now what
Musk's Twitter usage has been in the spotlight since the CEO's Aug. 7 tweets about considering taking the company private. The tweets resulted in a suit from the SEC against Elon Musk, in which the SEC said some of the tweets were "false and misleading."
Though Musk and Tesla settled the suit with the SEC, some investors might worry Musk's actions on Thursday could still threaten the settlement. A former SEC enforcement lawyer told Bloomberg the SEC "can theoretically seek to pull the settlement" if they feel Musk isn't complying with the agreed-upon settlement, which included orders for Tesla to implement controls over Musk's communications.
