Tesla CEO Elon Musk’s dispute with federal regulators is making investors nervous.
Tesla CEO Elon Musk’s habit for sparring with federal securities regulators is making Wall Street nervous.
Tesla shares seesawed Tuesday, falling by as much as 2.2 percent before recovering, hours after the U. S. Securities and Exchange Commission doubled down on its allegation that Musk “blatantly violated” a settlement with the agency by discussing the company’s production forecasts on Twitter on Feb. 19. The agency has filed a request for a court to hold Musk in contempt, which Musk’s legal team called “concerning and unprecedented overreach on the part of the SEC.”
Concerns are growing that Musk’s troubles with the SEC have become a needless and cumbersome distraction for a company that already has a lot on its plate.
“I think it’s an overhang on the stock,” Oppenheimer analyst Colin Rusch said on CNBC’s “Squawk Box” on Tuesday. “There’s really no benefit from this sort of activity.”
Tesla has just finally begun selling a long-awaited $35,000 variant of the Model 3 midsize electric sedan, a key product for the company in many investors’ eyes. Tesla also just unveiled another key product: a crossover utility vehicle called the Model Y, which is meant to bring Tesla into one of the most popular segments in the car market.
