Musk entered into an argument with the SEC. Tesla Motors shares fell
Tesla Motors shares fell immediately by 5%. The reason is the conflict between Elon Mask and the US Securities and Exchange Commission (SEC). Earlier, representatives of the SEC filed a lawsuit, focusing on the fact that Musk does not adhere to the previously concluded pretrial transaction and shows disrespect for the court. Let us understand in more detail the essence of the next scandal around the world famous automaker.
February 19, Elon Musk published a tweet in which he said that Tesla Motors plans to produce 500 thousand cars for 2019. However, the same day the billionaire wrote on his Twitter page that in fact it is planned to release 400 thousand cars. Commission representatives blamed Tesla’s CEO for not coordinating the message with Tesla board members.
The SEC noted that Musk posted inaccurate dataonce again that can confuse investors. Elon’s Tweet read over 24 million users of a social network. The Commission found the information provided by the general director of Tesla about half a million cars unreliable.
Musk responded to these statements by posting another tweet. He wrote something like the following: “The commission did not familiarize itself with the Tesla plan for 2019, where it was said about the release of 350,000 to 500,000 cars. What a shame. ” ThenElon noted that he respects the court, and such accusations by the SEC are groundless.
What kind of pre-trial deal are we talking about? The fact is that in 2018 SEC representatives suspected Elon Mask of manipulating the market. On Twitter, the billionaire said he plans to stop Tesla Motors from trading on exchanges. Musk added that he was going to purchase all the securities of the electric car manufacturer, paying $ 420 per share, and even found an investor who would finance it. The value declared by Elon exceeded the price of the automaker’s shares by 20%. Immediately after the tweet was posted, the securities were up 11%.
SEC appealed to the court, which offered the terms of reconciliation of the parties. The pre-trial agreement stated that Musk must leave the position of the head of the constituent council (the court allowed him to remain as CEO), pay a $ 20 million fine, and coordinate subsequent reports with the company’s management. It was the last point that caused the next dispute between Mask and the SEC.
Despite the fall, Tesla Motors shares are considered undervalued
Despite the conflict between Musk and the US Securities and Exchange Commission, experts advise buying Tesla Motors shares. According to analysts, automaker stocks for 2019 may rise by more than 50%. The estimated cost by the end of the year is $ 450.
Experts at research firm Jefferies emphasize that the auto giant easily exceeds the estimates of consensus. There is no unnecessary stress for the company’s capital at the moment. The profitability of Tesla Model 3, despite the cheaper car, still exceeds 20%. Therefore, there are all prerequisites for the acquisition of securities of the electric vehicle manufacturer.
