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Elon Musk’s Twitter tirade comes amid SEC probe on Tesla’s Model 3 production ramp

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7 years ago

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Tesla shares (NASDAQ:TSLA) experienced a steep dive on Friday’s trading, dropping more than 7% amidst reports that U.S. District Court Judge Alison Nathan has asked Elon Musk and the Securities and Exchange Commission to justify the terms of their settlement over the CEO’s “funding secured” lawsuit. Also weighing down Tesla’s stock was Elon Musk’s latest Twitter session, where he seemingly trolled the SEC by dubbing the agency as the “Shortseller Enrichment Commission,” and then doubling down.

Update: Tesla CEO Elon Musk faces contempt claim from SEC over recent tweets

Musk’s latest round of tweets has polarized the Tesla community, as a number of retail investors began directly addressing their concerns to the CEO regarding his behavior and its effects on the price of TSLA stock. While Musk assured the community that they would be fine if they are invested for the long-term, several retail investors nonetheless informed the CEO that they had lost a considerable amount of money due to the apparent market-moving effects of his tweets. 

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While the reasons behind Elon Musk’s latest Twitter session are still up for question, some details about the CEO’s aggravation over the SEC appear to have been teased by FBN’s Charlie Gasparino. In a segment on Fox Business, Gasparino noted that sources close to Tesla’s legal team and the SEC had informed him that the agency is still investigating Tesla, not because of Elon Musk’s “funding secured” tweet, but over the company’s previous forecasts on the Model 3 production ramp and and the company’s profitability. 

“What we reported was from people close to the Tesla legal team and the Elon Musk legal team. What they’re telling us is that the SEC does continue to investigate Tesla. Remember, the “funding secured” thing is out of the way, but there’s an existing investigation that could take a bit longer. It involves Tesla and Elon Musk’s stated production goals for the Model 3 largely, and profitability; if those things match up to reality, and whether there’s a fraud case by saying ‘Hey, we’re gonna reach profitability, for example.’”

“The case focuses again on targets that Musk made and some of the other corporate executives as well, about when the Model 3 was gonna come out, how many were gonna be produced, and profitability. When Tesla was gonna be profitable. Remember, these goals have changed along the way. He’s now saying the third quarter should be profitable. We’ll see if it happens.”

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Gasparino noted that the SEC’s investigation into Tesla’s Model 3 production and profitability goals would likely be more challenging for the agency than its “funding secured” lawsuit against the CEO. In order to corner Musk and Tesla, the SEC would have to prove that the company knowingly misled investors about the Model 3 ramp. If Tesla or Elon Musk admits that it has honestly miscalculated the progress of the Model 3 ramp, the SEC would likely have a difficult time proving its case. Gasparino noted that his sources in the SEC had informed him that this other Tesla investigation would likely be a very “tough” venture for the agency.

“This is a much tougher case. While it still exists, it’s still problematic for the company; it’s a much tougher case than the other one. This is something that you literally have to go back, look at his statements, look at potential emails where they might be telling each other ‘Hey, we know this is BS, we’re just throwing it out there.’ That’s what the SEC is looking at. So this is a much tougher case, and that’s why the market looks like it’s coming off its lows on this, because people are saying ‘Maybe they got done with the other case, and that’s about it.’”

“This is where we are right now. We should point out that cases like this take months. They’re tough to prove. Very hard to prove that someone was specifically lying about a production goal. You could say “Listen, I thought we’re gonna produce that many Model 3, I thought we were gonna hit production profitability in the second quarter. I was wrong, I misinterpreted.”   That type of honest mistake, even though I think most CEOs know you shouldn’t say that sort of stuff. You try not to get forward-looking statements; you always run into problems. That is a tougher case then ‘funding secured,’ and you don’t have funding secured.

“I think if you’re betting that he might be, from a regulatory standpoint, largely out of the woods. I’m not saying he is. If you’re betting, I’m just saying these are tougher, tougher cases. And I can tell you, my sources inside the SEC are telling me that.”

There is no denying that Elon Musk’s Twitter twitter behavior has resulted in losses for Tesla’s investors once more. By the time markets closed on Friday, Tesla stock had lost the recovery it gained earlier in the week after the release of its impressive Q3 production and delivery numbers, as well as the announcement of Elon Musk and the SEC’s settlement. In this sense, Elon Musk’s decision to poke the agency seems like a miscalculation at best.

That said, if the seasoned journalist’s sources are correct and the SEC is still pursuing Tesla over its Model 3 goals, at a time when production of the electric sedan is hitting its stride and the vehicle is getting warmly received by consumers, then Elon Musk’s aggravation becomes a bit more understandable. Nevertheless, with millions in the Tesla community investing their hard-earned money to support the company, then it seems safe to say that Elon Musk should have known better.

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Watch Charlie Gasparino’s segment on Fox Business in the video below. 

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Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Twitter co-founder Jack Dorsey endorses Elon Musk Tesla pay package

Dorsey framed the pay package as an engineering and governance crossroads for Tesla.

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3 hours ago

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November 6, 2025

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Twitter co-founder and Square CEO Jack Dorsey has publicly backed Elon Musk’s leadership ahead of Tesla’s pivotal shareholder vote, which is expected to be decided later today at the company’s 2025 annual meeting. 

Dorsey framed the pay package as an engineering and governance crossroads for Tesla.

Dorsey’s public nod framed as an engineering defense of Musk

In a post on X, Dorsey weighed in on Tesla’s post about being in a “critical inflection point.” As per the Twitter-co-founder, the vote on Musk’s 2025 performance award is not about compensation. Instead, it’s about ensuring the path for the company’s engineering in the coming years. 

“This is not about compensation. it’s about ensuring a principled (and exciting!) engineering approach to the company’s future,” Dorsey wrote on his post, later stating that users of Cash app with TSLA shares would be able to vote for the CEO’s proposed 2025 performance award. 

Elon Musk appreciated Dorsey’s endorsement, responding to the Twitter co-founder’s post with a heart emoji. Musk has been pretty thankful for the support for is fellow tech executives, also thanking Michael Dell recently, who also advocated for its proposed 2025 performance award.

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Musk’s support

While Elon Musk’s 2025 performance award has received opposition from proxy advisors such as Glass Lewis and ISS, it has received quite a lot of support from longtime bulls such as ARK Invest, and, more recently, Schwab Asset Management following calls from TSLA retail shareholders. 

“Schwab Asset Management’s approach to voting on proxy matters is thorough and deliberate. We utilize a structured process that focuses on protecting and promoting shareholder value. We apply our own internal guidelines and do not rely on recommendations from Glass Lewis or ISS. In accordance with this process, Schwab Asset Management intends to vote in favor of the 2025 CEO performance award proposal. We firmly believe that supporting this proposal aligns both management and shareholder interests, ensuring the best outcome for all parties involved,” Charles Schwab told Teslarati.

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Tesla Robotaxi and autonomy dreams lean on shareholders: Wedbush

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1 day ago

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November 5, 2025

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Credit: Tesla Europe & Middle East/X

Tesla’s dreams of developing a Robotaxi suite that utilizes a fully autonomous platform developed by the company’s top-tier talent now lean on shareholders and perhaps the most crucial vote in its history.

That’s what Dan Ives of Wedbush said in a new note to investors on Wednesday. As the Annual Shareholders’ Meeting is now just one day away, investors are down to their final chance to vote for or against Elon Musk’s new compensation plan.

Ives wrote that, while the company has made its intentions clear, wanting to maintain Musk, pay him accordingly, and give him the voting power he has long wanted, ultimately, the responsibility falls on investors.

As many retail shareholders have pushed for people to vote for Musk’s compensation package, there are a handful of large-scale funds and firms that have decided to go in another direction. Bullish Wall Street firms, Wedbush being one of them, believe it is crucial for Tesla to maintain Musk.

The vote could have major implications on whether Tesla launches an autonomous Robotaxi suite in the near future, Ives says:

“Getting Musk’s pay package approved tomorrow at the highly anticipated meeting will be a big step towards advancing Tesla’s future goals with the autonomous and Robotaxi roadmap ahead.”

While some investors are convinced the company is ready to go in a different direction simply based on Musk’s political involvement over the past year, many investors are under the impression that the development of Tesla’s autonomy suite, as well as its prowess in the EV sector, would fall if Elon were not at the helm.

Tesla’s Board of Directors has already stated that they have received confirmation that Musk’s political involvement would wind down in a timely manner. Moving forward, his focus will not veer from the mission of any of his companies; at least that’s what can be gathered from some of the Board’s communications over the past month.

Musk’s new compensation package is incentivized by performance metrics and will require him to achieve a handful of lofty tranches. He will not get paid unless he drives shareholder value, which is something many skeptics tend to leave out.

Ives continues:

“This new incentive-driven pay package for Musk would also provide an additional 423 million shares of common stock (~12% of shares), which would increase his ownership of Tesla up to ~25% voting power, which we believe was critical to keep Musk at the helm to lead Tesla through the most critical time in the company’s history. We believe this was the smart move by the Board to lay out these incentives/pay package at this key time as the biggest asset for Tesla is Musk…and with the AI Revolution, this is a crucial time for Tesla ahead with autonomous and robotics front and center.”

Wedbush maintained its Outperform rating and $600 price target on shares.

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UPDATE: Tesla investors push Charles Schwab for Musk comp plan clarification

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2 days ago

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November 4, 2025

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tesla cybertruck elon musk
Tesla CEO Elon Musk unveils futuristic Cybertruck in Los Angeles, Nov. 21, 2019 (Photo: Teslarati)

Update: 4:00 p.m. EDT – Charles Schwab has reached out to TESLARATI with the following statement, clarifying that it plans to vote FOR Musk’s compensation package:

“Schwab Asset Management’s approach to voting on proxy matters is thorough and deliberate. We utilize a structured process that focuses on protecting and promoting shareholder value. We apply our own internal guidelines and do not rely on recommendations from Glass Lewis or ISS. In accordance with this process, Schwab Asset Management intends to vote in favor of the 2025 CEO performance award proposal. We firmly believe that supporting this proposal aligns both management and shareholder interests, ensuring the best outcome for all parties involved.”
There have also been updates to the headline and various paragraphs to reflect this as well as accuracy.

Tesla investors are pushing Charles Schwab for clarification after it was expected to vote against CEO Elon Musk’s pay package.

Several high-profile Tesla influencers are speaking out against Charles Schwab, saying its decision to vote against the plan that would retain Musk as CEO and give him potentially more voting power if he can achieve the tranches set by the company’s Board of Directors.

The Tesla community appeared to see that Schwab is one firm that tends to vote against Musk’s compensation plans, as they also voted against the CEO’s 2018 pay package, which was passed by shareholders but then denied by a Delaware Chancery Court.

Schwab’s move was recognized by investors within the Tesla community and now they are speaking out about it:

At least six of Charles Schwab’s ETFs were expected to vote against Tesla’s Board recommendation to support the compensation plan for Musk. The six ETFs represent around 7 million Tesla $TSLA shares.

Jason DeBolt, an all-in Tesla shareholder, summarized the firm’s decision really well:

“As a custodian of ETF shares, your fiduciary duty is to vote in shareholders’ best interests. For a board that has delivered extraordinary returns, voting against their recommendations doesn’t align with retail investors, Tesla employees, or the leadership we invested to support. If Schwab’s proxy voting policies don’t reflect shareholder interests, my followers and I will move our collective tens of millions in $TSLA shares (or possibly hundreds of millions) to a broker that does, via account transfer as soon as this week.”
Tesla shareholders will vote on Musk’s pay package on Thursday at the Annual Shareholders Meeting in Austin, Texas.

It seems more likely than not that it will pass, but investors have made it clear they want a decisive victory, as it could clear the path for any issues with shareholder lawsuits in the future, as it did with Musk’s past pay package.

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