$TSLA

Many investors thought the battle between Elon Musk and the SEC was over, but unfortunately it appears the SEC is 2Xing down on their pressure on Tesla’s (NASDAQ:TSLA) CEO.

The last thing stock Bulls want to see is the SEC and Mr. Musk back in the courts. This has caused some investors to trim positions as the worries around this situation are starting to grow on The Street.

The EV maker’s stock had long defy gravity, with many analysts and investors characterizing it as a “cult stock” that soared despite concerns over the company’s performance.

But Tesla shares have fallen nearly 20% over the last 12 months, and about 19% from their price at the beginning of this year. Tesla shares marked 266.97 in early trade Wednesday, and closed at 273.60, + 2.29%.

There are several concerns on the table, including the company’s cash position, its ability to maintain profitability and demand for its M-3 midsize sedan and newly revealed Model Y crossover.

And, worries have also surrounded Mr. Musk’s behavior, including his sometimes controversial comments on social media and in interviews.

This has begun to impact the stock, people are hedging themselves a bit considering that the 1st part of the year is typically weak for car sales.

Mr. Musk settled a dispute with the SEC in September over a Tweet he made in August in which said that he was considering taking Tesla private and that he had already secured the funding, which later turned out to be wrong. Mr. Musk’s settlement with the Commission requires Tesla to pre-approve anything Mr. Musk says publicly about Tesla, including whatever he says on social media.

“It is therefore stunning to learn that, at the time of filing of the instant motion, Musk had not sought pre-approval for a single one of the numerous tweets about Tesla he published in the months since the Court-ordered pre-approval policy went into effect,” the SEC said in a court document filed Monday.

Mr. Musk Tweeted on 19 February that he expected Tesla to produce 500,000 cars in Y 2019, defended the comment by saying was only discussing information he had previously revealed.

“Under no fair reading of the materiality standard did Musk’s proud and optimistic restatement of publicly disclosed information, coming after the market closed, ‘significantly alter’ the total mix of information available to investors,” said his legal team in a 11 March response to the SEC.

The case is U.S. SEC v Elon Musk, US District Court, Southern District of New York, No. 1:18-cv-8865-AJN-GWG

HeffX-LTN’s overall technical outlook for TSLA is Bearish to Very Bearish in here.

Stay tuned…

  bearish, Musk, price, SEC, stock, Tesla, TSLA

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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