DETROIT (AP) – Tesla CEO Elon Musk is re-examining the dubious comments he made to Wall Street analysts this time about his company’s vehicle manufacturing status.
During a conference call on January 27 to discuss Tesla’s fourth-quarter earnings, Musk announced that the company was producing new versions of its oldest model, the S sedan և X large SUV. He added that a high-quality version of the electric S “Plaid” will be available in February.
In fact, Tesla did not produce any models during the quarter, according to shipping-production data released by the company late last week. Instead, the approximately 180,000 vehicles made by Tesla from January to March were its other models: the 3 small sedan և Y small SUV.
Experts say that the discrepancy between the Musk statement and the zero production index of analysts endangers the attention of Musk’s old nemesis, the US Securities and Exchange Commission. For years, the agency has clashed with Musk over suspicious statements he made on Twitter that affected Tesla’s share price.
“I think he may have some problems with the SEC,” said Anthony Sabino, a law professor and professor of law at St. John’s University. “These are quite direct statements. They are quite unambiguous. “
Columbia University Professor C. on S. Kofi Jr., a leading body in securities law and corporate governance, said Musk’s assertion seemed to be a statement of fact, not just a prediction of Tesla’s future production. If the SEC agrees, Coffee said, it could launch an investigation.
At the same time, Coffee noted, Tesla could have argued that Musk’s statement was merely a prediction, not a declaration of fact, that something later happened to change that prediction. If regulators agree, Muskie’s statement will be defended by Tesla’s standard refutation of the uncertainty of prospective statements.
The SEC declined to comment. The messages sent to Tesla, which dissolved its press office, remained unanswered.
This is hardly the first time Musk has raised questions about Tesla’s claims about vehicle production. In 2017, the SEC investigated allegations made by Tesla about the production of the Model 3 at its plant in Fremont, California. The agency closed the survey in 2019 without taking any action, according to Tesla’s 2020 annual financial report. The Ministry of Justice also requested information on production. The status of the investigation is unknown.
“As far as we know,” Tesla’s report said, “no state body has concluded any wrongdoing as a result of any ongoing investigation.”
In 2018, the SEC accused Musk of securities fraud over allegations he made on Twitter that he had the necessary funding to take over Tesla – a dispute that pushed up Tesla shares. In fact, Musk had no money to spare. The case was settled, աս Musk and Tesla agreed to pay a $ 20 million fine և to hire someone to review Musk’s tweets before sending them.
Musk does not hide his contempt for the SEC. Distorting the meaning of the agency acronym, he called the SEC a “short sale enrichment commission.” Short traders are betting that stock prices will fall, he said in a television interview, saying he did not respect the commission.
There is no doubt that Musk announced at the conference that Tesla is producing the S և X models.
“We are very pleased to announce that the new Model S և Model X Plaid is currently in production և they will be delivered in February,” Musk said. “Thus, we were able to launch the Plaid Model S և X – the Model S will be delivered in February and the Model Model a little later. “Model S Plaid, we are actually in production now, will be introduced next month.”
Even if Musk’s claim is backed up by denials of production estimates, legal experts say they expect the SEC to at least look into the matter and perhaps launch an investigation.
“Sometimes the strength of the personality of certain corporate executives, the potential market impact of their statements, is exacerbated by regulatory oversight,” said Jacob Jacob Frenkel, a SEC enforcement officer and former federal prosecutor who works with Dickinson Wright in Washington.
Frenkel noted that there is a lot of dependence on whether the SEC considers Musk’s statements to be “material”, that is, something that a reasonable investor would consider possible in determining the trading of the company’s shares.
“The discovery of production can be considered material,” said Frenkel.
“The SEC, under the new leadership of President Biden, may have a ‘different view of accountability’ than it did under the Trump administration,” Frenkel said.
As it turned out, Musk’s claim did not benefit Tesla shares. The stock price fell 3% the day after the conference call. Since then, it has fallen by more than 20% as the shine has worn off technology-electric vehicle stocks. Although throughout 2020, Tesla shares rose more than 700%.
Before the company announced its figures last week, analysts expected Tesla to introduce about 13,000 S S X models in the first quarter.
At a conference on January 27, Tesla CEO Acha Akar Kirkhorn responded to Musk by saying that the company was producing S և X models, although Kirkhorn warned that production would be low due to the transition to new versions.
Kirkhorn added that the company is trying to manage the global shortage of semiconductors. A shortage that has disrupted the entire auto industry, forcing many automakers to cut production. Some analysts attribute Tesla’s zero S և X production to a lack of chips.
“I doubt they would have prosecuted him if there was a legal flaw or problem,” Coffee said.
But Frenkel said Tesla’s refusal may not help.
“We must not refuse a false statement or omission to disclose material facts,” Frenkel said. “Otherwise, it will not distrust the disclosure of corporate information.”