- The SEC filed charges against Tesla CEO Elon Musk on Sept. 27.
- In August, Musk rescinded a sudden plan to take Tesla private.
- The last antic from Musk caused Tesla’s stock to drop as much as 10 percent.
Tesla shares fell by more than 10 percent in after-hours trading on Sept. 27 after news broke that the Securities and Exchange Commission was suing CEO Elon Musk for fraud. The legal action stems from a tweet Musk made back in August 2018 about taking Tesla private, which the SEC considered false and misleading, reported Bloomberg.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
The controversial CEO of Tesla and SpaceX also made headlines earlier in September after smoking marijuana during a live interview. Musk also sipped whiskey during the interview with Joe Rogan, who runs the podcast, “The Joe Rogan Experience.” The interview was broadcast live to Rogan’s followers late Thursday, Sept. 6, 2018.
This are the latest controversies that threaten the security of Musk’s business and related investments, and thus, his investors’ interests. Tesla’s stock value dropped as much as 10 percent following the toke session, the steepest intraday drop since June 2016, reported Bloomberg. Tesla stock (TSLA) was trading at around $262 as of Sept. 7, 2018, according to Nasdaq.
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“I’m not a regular smoker of weed,” Musk assured Rogan. Though it was reportedly a single toke, Musk also said in an August 2018 interview that he occasionally uses Ambien in order to sleep, suggesting the hectic and sometimes chaotic nature of his position. Tesla employees have also reported finding the CEO asleep under tables and around the office, according to Business Insider. However, these might be the least of Musk’s problems.
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Dave Morton, Tesla’s chief accounting officer who just joined the company in August 2018, gave notice that he was leaving the company amid the publicity surrounding it. Additionally, Gabrielle Toledano, the head of human resources, announced to Bloomberg that she wouldn’t be returning to the company after her leave of absence.
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Tesla’s sudden, stark stock devaluation is the latest chapter in Musk-related discrepancies that began in August 2018 when he announced he wanted to privatize Tesla at $420 a share — ironic, perhaps, given that the number 420 is a signifier of marijuana use among social media and weed culture. The announcement reportedly caught Tesla’s board off guard, and Musk reversed his position soon after, but not before Tesla’s stock spiked a bit upward during the confusion. Furthermore, the sudden proclamation also drew the attention of the SEC, which was investigating whether Musk’s tweets constitute misleading Tesla investors, CNN Money reported in August.
Musk’s Twitter behavior affecting Tesla also includes his accusation that one of the Thailand cave rescuers is a pedophile. Vernon Unsworth assisted in the rescue of 12 members of a Thai youth soccer team and their coach in July 2018. Unsworth disparaged Musk’s publicized idea to build a new submarine to extract the cave-stuck people, to which Musk responded with his accusations. This tweet caused Tesla’s stock to drop 4 percent, according to Fortune.
Musk’s behavior has jeopardized Tesla’s stock value, but amid the haze of the cannabis controversy, it’s less clear if he’s willing to rein in his actions. The uncertainty of Tesla’s stock value and Musk’s behavior has investors on edge, and whether they’ll ride out this latest fluctuation or dump the stock remains to be seen.
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This article originally appeared on GOBankingRates.com: Tesla Stocks Drop as SEC Files Fraud Charges Against Elon Musk