Investor's Corner
Elon Musk’s ‘reckless conduct’ on Twitter highlighted by SEC in fiery rebuttal
The Securities and Exchange Commission (SEC) has issued a fiery response to the points outlined by Elon Musk’s legal team last week, which saw the Tesla CEO take a firm stand against the allegations of the agency. According to the SEC’s response, Musk must be held in contempt because his “reckless actions” on social media have been “stunning.”
Musk’s ‘stunning’ conduct
The SEC filed its rebuttal of Musk’s points on Monday, arguing that Musk has made no diligent or good faith effort to comply with the pre-approval provision of the court’s order. The SEC also pointed out that none of Elon Musk’s tweets since he reached a settlement with the agency last year were screened before they were posted online.
“The pre-approval requirement was designed to protect against reckless conduct by Musk going forward. It is therefore stunning to learn that, at the time of filing of the [contempt] 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. Musk reads this Court’s order as not requiring pre-approval unless Musk himself unilaterally decides his planned tweets are material. His interpretation is inconsistent with the plain terms of this Court’s order and renders its pre-approval requirement meaningless” the agency wrote.
Material Information
The agency also argues that Musk’s February 19 tweet, where he noted that Tesla would produce around 500,000 vehicles in 2019, was material information to Tesla and its shareholders. The agency added that the frequency of Tesla’s references to its production forecast in its public statements is proof that such statements are material for the company.
“Musk’s recognition of the significance of Tesla’s vehicle production forecasts to investors is evidenced by the frequency with which he and Tesla highlight such forecasts in their public statements. For years and continuing through the company’s most recent earnings release, Tesla and Musk have prominently featured vehicle production forecasts in their public communications, including Tesla’s investor letters, Musk’s tweets, and the company’s filings with the SEC. While some companies emphasize forward-looking guidance on financial metrics such as revenue and earnings per share, Tesla often highlights guidance regarding expected production rates and deliveries. Given this focus on Tesla’s production capabilities, Musk cannot credibly argue that his statement, as Tesla’s CEO, that the company ‘will make around 500k’ cars in 2019 could not have reasonably contained information material to Tesla and its investors,” the SEC argued.
Disclosures
The SEC further argued that Musk’s tweet was different from the previous public disclosures. Tesla’s Q4 2018 and Full Year Update Letter noted that the company is expecting to deliver 360,000 to 400,000 vehicles in 2019, though Musk later pointed out in the earnings call that Tesla is aiming to produce around “maybe in the order of 350,000 to 500,000 Model 3s” this 2019. The SEC does not recognize Musk’s statement in the earnings call.
“Disputing the logical conclusion that new information about a critical company metric reasonably could be material to Tesla’s shareholders, Musk claims that the 7:15 tweet ‘simply was not ‘news.’’ It is frankly difficult to follow Musk’s tortured analysis, which attempts to cobble together information from various public statements by Tesla in January 2019 to arrive at the post hoc conclusion that his 7:15 tweet was ‘within previously disclosed ranges.’ Regardless, Musk’s arguments do not change the fact that, before the 7:15 tweet, Tesla had never disclosed that it planned to make around 500,000 cars in 2019. Therefore, Musk was required to obtain pre-approval before he published this statement.
“Prior to the 7:15 tweet, Tesla had not publicly disclosed any forecast of the total number of vehicles it expected to produce in 2019. This should end the Court’s inquiry as to whether Musk’s failure to seek pre-approval constituted a violation of the Court’s order. In the absence of an affirmative forecast on this important topic, Musk’s tweet contained new information that could reasonably have been material to Tesla and its shareholders.
“Tesla had, however, previously provided a clear forecast of total vehicle deliveries in 2019. Specifically, Tesla’s January 30, 2019 Fourth Quarter & Full Year Update (‘Update Letter’) stated, “In total, we are expecting to deliver 360,000 to 400,000 vehicles in 2019 . . . .” Tesla included the same delivery forecast in the pre-approved talking points for its January 30 earnings call. Evidently at a loss as to how to explain the material difference between the company’s repeated deliveries guidance and his 7:15 tweet, Musk’s brief does not even mention the deliveries guidance.
“Instead, Musk argues that his tweet could not reasonably have been material because Tesla previously stated that it was ‘targeting’ an annualized production rate in excess of 500,000 Model 3 vehicles sometime between Q4 of 2019 and Q2 of 2020. This guidance was also given in Tesla’s 2018 Form 10-K and during Tesla’s January 30 earnings call. But this was a qualified forecast (‘targeting’) of Tesla’s expected achievement of a production run rate (not of aggregate production) for a particular vehicle line at some future point in time (somewhere between late 2019 and the middle of 2020). On its face, the 7:15 tweet—which stated that Tesla will make around 500,000 cars in 2019—was materially different from Tesla’s production rate forecasts for Model 3.”
The skirmish continues
The release of the SEC’s response to Elon Musk’s stance would likely cause more volatility for Tesla and the performance of its stock (NASDAQ:TSLA). The agency and the CEO have clashed a number of times over the past year, and Tesla shareholders have been, for the most part, adversely affected. With the SEC’s response showing that the battle between Musk and the agency will likely continue, Tesla shareholders and those that follow the company closely would best be prepared for more ripples along the way.
A decision on the SEC’s request to hold Elon Musk in contempt of court for his February 19 tweet will be decided by the US District Court for Southern New York, the same office which which the CEO and the agency’s settlement last October.
The SEC’s rebuttal of Elon Musk’s arguments could be accessed here.
Elon Musk
Tesla stock gets latest synopsis from Jim Cramer: ‘It’s actually a robotics company’
“Turns out it’s actually a robotics and Cybercab company, and I want to buy, buy, buy. Yes, Tesla’s the paper that turned into scissors in one session,” Cramer said.
Tesla stock (NASDAQ: TSLA) got its latest synopsis from Wall Street analyst Jim Cramer, who finally realized something that many fans of the company have known all along: it’s not a car company. Instead, it’s a robotics company.
In a recent note that was released after Tesla reported Earnings in late January, Cramer seemed to recognize that the underwhelming financials and overall performance of the automotive division were not representative of the current state of affairs.
Instead, we’re seeing a company transition itself away from its early identity, essentially evolving like a caterpillar into a butterfly.
The narrative of the Earnings Call was simple: We’re not a car company, at least not from a birds-eye view. We’re an AI and Robotics company, and we are transitioning to this quicker than most people realize.
Tesla stock gets another analysis from Jim Cramer, and investors will like it
Tesla’s Q4 Earnings Call featured plenty of analysis from CEO Elon Musk and others, and some of the more minor details of the call were even indicative of a company that is moving toward AI instead of its cars. For example, the Model S and Model X will be no more after Q2, as Musk said that they serve relatively no purpose for the future.
Instead, Tesla is shifting its focus to the vehicles catered for autonomy and its Robotaxi and self-driving efforts.
Cramer recognizes this:
“…we got results from Tesla, which actually beat numbers, but nobody cares about the numbers here, as electric vehicles are the past. And according to CEO Elon Musk, the future of this company comes down to Cybercabs and humanoid robots. Stock fell more than 3% the next day. That may be because their capital expenditures budget was higher than expected, or maybe people wanted more details from the new businesses. At this point, I think Musk acolytes might be more excited about SpaceX, which is planning to come public later this year.”
He continued, highlighting the company’s true transition away from vehicles to its Cybercab, Optimus, and AI ambitions:
“I know it’s hard to believe how quickly this market can change its attitude. Last night, I heard a disastrous car company speak. Turns out it’s actually a robotics and Cybercab company, and I want to buy, buy, buy. Yes, Tesla’s the paper that turned into scissors in one session. I didn’t like it as a car company. Boy, I love it as a Cybercab and humanoid robot juggernaut. Call me a buyer and give me five robots while I’m at it.”
Cramer’s narrative seems to fit that of the most bullish Tesla investors. Anyone who is labeled a “permabull” has been echoing a similar sentiment over the past several years: Tesla is not a car company any longer.
Instead, the true focus is on the future and the potential that AI and Robotics bring to the company. It is truly difficult to put Tesla shares in the same group as companies like Ford, General Motors, and others.
Tesla shares are down less than half a percent at the time of publishing, trading at $423.69.
There are a lot of Tesla bulls out there who have astronomical expectations for the company, especially as its arm of reach has gone well past automotive and energy and entered artificial intelligence and robotics.
However, some of the most bullish Tesla investors believe the company could become worth $100 trillion, and CEO Elon Musk does not believe that number is completely out of the question, even if it sounds almost ridiculous.
To put that number into perspective, the top ten most valuable companies in the world — NVIDIA, Apple, Alphabet, Microsoft, Amazon, TSMC, Meta, Saudi Aramco, Broadcom, and Tesla — are worth roughly $26 trillion.
Will Tesla join the fold? Predicting a triple merger with SpaceX and xAI
Cathie Wood of ARK Invest believes the number is reasonable considering Tesla’s long-reaching industry ambitions:
“…in the world of AI, what do you have to have to win? You have to have proprietary data, and think about all the proprietary data he has, different kinds of proprietary data. Tesla, the language of the road; Neuralink, multiomics data; nobody else has that data. X, nobody else has that data either. I could see $100 trillion. I think it’s going to happen because of convergence. I think Tesla is the leading candidate [for $100 trillion] for the reason I just said.”
Musk said late last year that all of his companies seem to be “heading toward convergence,” and it’s started to come to fruition. Tesla invested in xAI, as revealed in its Q4 Earnings Shareholder Deck, and SpaceX recently acquired xAI, marking the first step in the potential for a massive umbrella of companies under Musk’s watch.
SpaceX officially acquires xAI, merging rockets with AI expertise
Now that it is happening, it seems Musk is even more enthusiastic about a massive valuation that would swell to nearly four-times the value of the top ten most valuable companies in the world currently, as he said on X, the idea of a $100 trillion valuation is “not impossible.”
It’s not impossible
— Elon Musk (@elonmusk) February 6, 2026
Tesla is not just a car company. With its many projects, including the launch of Robotaxi, the progress of the Optimus robot, and its AI ambitions, it has the potential to continue gaining value at an accelerating rate.
Musk’s comments show his confidence in Tesla’s numerous projects, especially as some begin to mature and some head toward their initial stages.
Elon Musk
Tesla director pay lawsuit sees lawyer fees slashed by $100 million
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
The Delaware Supreme Court has cut more than $100 million from a legal fee award tied to a shareholder lawsuit challenging compensation paid to Tesla directors between 2017 and 2020.
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
Delaware Supreme Court trims legal fees
As noted in a Bloomberg Law report, the case targeted pay granted to Tesla directors, including CEO Elon Musk, Oracle founder Larry Ellison, Kimbal Musk, and Rupert Murdoch. The Delaware Chancery Court had awarded $176 million to the plaintiffs. Tesla’s board must also return stock options and forego years worth of pay.
As per Chief Justice Collins J. Seitz Jr. in an opinion for the Delaware Supreme Court’s full five-member panel, however, the decision of the Delaware Chancery Court to award $176 million to a pension fund’s law firm “erred by including in its financial benefit analysis the intrinsic value” of options being returned by Tesla’s board.
The justices then reduced the fee award from $176 million to $70.9 million. “As we measure it, $71 million reflects a reasonable fee for counsel’s efforts and does not result in a windfall,” Chief Justice Seitz wrote.
Other settlement terms still intact
The Supreme Court upheld the settlement itself, which requires Tesla’s board to return stock and options valued at up to $735 million and to forgo three years of additional compensation worth about $184 million.
Tesla argued during oral arguments that a fee award closer to $70 million would be appropriate. Interestingly enough, back in October, Justice Karen L. Valihura noted that the $176 award was $60 million more than the Delaware judiciary’s budget from the previous year. This was quite interesting as the case was “settled midstream.”
The lawsuit was brought by a pension fund on behalf of Tesla shareholders and focused exclusively on director pay during the 2017–2020 period. The case is separate from other high-profile compensation disputes involving Elon Musk.
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