In choppy trading on Friday, shares of Tesla Inc. hit a new two-year low as top executive Elon Musk's pledge to hold onto his Tesla stock for at least two more years failed to assuage investors.
Since the end of last year, Musk has sold shares in the most valuable automaker in the world worth $40 billion, with $15 billion of those sales coming after he made comparable promises in April, in part to pay for the purchase of Twitter.
"If Musk sells another billion or so dollars of shares in the near future, and that exerts downward price pressure on Tesla's share price, investors might have a decent claim for securities fraud," said Howard Fischer, a former U.S. Securities and Exchange Commission (SEC) attorney and a partner at law firm Moses & Singer.
According to SEC regulations, public companies and their executives must provide accurate information that could be important to investors via channels that investors are aware of and actively follow. Typically, it doesn't say how businesses should go about doing that.
"If this was another CEO of a Fortune 500 company making that statement, the market would be confident that 'he said it, so he's not selling,'" said Dennis Dick, head trader and market structure analyst at Triple D Trading.
Investors are concerned that the billionaire's time was being heavily consumed by Twitter as evidenced by the fact that Tesla shares are down 64% for the year, possibly their worst annual performance since going public in 2010.
After falling as much as 3.5% earlier to its lowest level since September 2020, the stock last declined 0.6% on Friday.
With the SEC, Musk has a history of issues.
For tweeting about his intention to take Tesla private in 2018, Musk drew the ire of the regulator, who ordered him to resign as the company's chairman, appoint additional directors, and pay $40 million in fines. Additionally, the SEC insisted that measures be taken to monitor Musk's communications.
"Musk looks rattled, vowing not to sell more stock and floating the idea of share buybacks. Short-sellers are firmly in control, and there is a lot of hesitation by retail to buy this dip," said Edward Moya, senior market analyst at OANDA.
According to S3 Partners, there are currently 3.1% of float shares that are short Tesla stock, a 33% increase since the beginning of the fourth quarter.
(Source:www.theprint.in)
Since the end of last year, Musk has sold shares in the most valuable automaker in the world worth $40 billion, with $15 billion of those sales coming after he made comparable promises in April, in part to pay for the purchase of Twitter.
"If Musk sells another billion or so dollars of shares in the near future, and that exerts downward price pressure on Tesla's share price, investors might have a decent claim for securities fraud," said Howard Fischer, a former U.S. Securities and Exchange Commission (SEC) attorney and a partner at law firm Moses & Singer.
According to SEC regulations, public companies and their executives must provide accurate information that could be important to investors via channels that investors are aware of and actively follow. Typically, it doesn't say how businesses should go about doing that.
"If this was another CEO of a Fortune 500 company making that statement, the market would be confident that 'he said it, so he's not selling,'" said Dennis Dick, head trader and market structure analyst at Triple D Trading.
Investors are concerned that the billionaire's time was being heavily consumed by Twitter as evidenced by the fact that Tesla shares are down 64% for the year, possibly their worst annual performance since going public in 2010.
After falling as much as 3.5% earlier to its lowest level since September 2020, the stock last declined 0.6% on Friday.
With the SEC, Musk has a history of issues.
For tweeting about his intention to take Tesla private in 2018, Musk drew the ire of the regulator, who ordered him to resign as the company's chairman, appoint additional directors, and pay $40 million in fines. Additionally, the SEC insisted that measures be taken to monitor Musk's communications.
"Musk looks rattled, vowing not to sell more stock and floating the idea of share buybacks. Short-sellers are firmly in control, and there is a lot of hesitation by retail to buy this dip," said Edward Moya, senior market analyst at OANDA.
According to S3 Partners, there are currently 3.1% of float shares that are short Tesla stock, a 33% increase since the beginning of the fourth quarter.
(Source:www.theprint.in)
