By Zarifa Huq
Many know or at least have heard of the infamous tweet by Elon Musk saying he was considering taking Tesla private and had the funding to do so. This tweet from 2018, which had the U.S. Securities and Exchange Commission (SEC) filing a claim against the Tesla chairman for ‘false and misleading’ statements led to both parties going to court.
“Take a deep breath, put your reasonableness pants on, and work this out,” U.S. District Judge Alison Nathan proclaimed.
The lawsuit and the following deal had both Tesla and Musk paying $20 million in penalty fees and though, the SEC tried to have Musk step down as chairman, he was ultimately allowed to keep his role. The most interesting part of that deal focused on Musk’s social media presence and mandated that a company lawyer check for any material information about Tesla’s productions before approval for posting.
Yet Musk had not heeded this plan as the SEC lobbied yet another complaint about a “financially relevant” tweet of Elon Musk’s bringing them to court for a second time, this time about the number of Tesla vehicles to be produced.
With the Honorable Judge Nathan presiding over the case again, she has granted Musk and the SEC 2 weeks to discuss an agreement. If an agreement cannot be negotiated in such a time frame, she can find Musk in contempt and force him to submit reports of how Teslas’s lawyers are monitoring his tweets.
Musk must find a way to utilize the time-pressure of the 2-week window to negotiate with the SEC. The significance of social media in this instance cannot be discounted. Twitter, once a seemingly small platform has catapulted even the smallest ideas into the world to be retweeted by celebrities and influencers galore. As Musk’s tweets gained more traction, more eyes, and more critique, the consequences came. Though he is a massive influence in the automotive field and an innovator of the highest sort, something as simple as a 140 character message tossed out to the world wide web could have his kingdom crumbling down.
Celebrities have altered the market with tweets before. Kylie Jenner tweeted that she no longer opens the Snapchat app anymore had the stock for the app plummeting to a $1.3 billion dollar loss. Billionaire Carl Icahn of Icahn Enterprises tweeted that he thought Apple was undervalued, which shot Apple stock up and supplied a $17 billion uptick in value.
There is a level of responsibility these social media influencers must be aware of and that includes Elon Musk who is in court now because of his careless messaging on social media which in turn manipulated markets unfairly. Elon Musk is now in negotiations with the SEC where he will argue that “the tweet in question was true, immaterial to shareholders, and in no way a violation of [his] agreement.”