Elon Musk and the Securities and Exchange Commission resolved their dispute over Musk’s tweets, they said in a court filing Friday, removing some uncertainty around Musk’s leadership of Tesla.
The new agreement details nine categories of information that must be screened, such as Tesla’s “financial condition, statements, or results, including earnings or guidance.” The categories also include such information as possible acquisitions and business deals, as well as production, sales and delivery numbers that include forecast or projected figures. Senior personnel or board changes would also have to be approved, among other nonpublic disclosures.
The agreement, which still requires approval by a judge, is a narrower definition of what content would be subject to screening than what they had agreed to in September as a consequence of Musk tweeting that he had “funding secured” to take Tesla private. The prior agreement, which required approval for any “written communications that contain, or reasonably could contain information material to the Company or it shareholders,” was broader.
In February, the SEC asked U.S. District Judge Alison Nathan to hold Musk in contempt, alleging a Feb. 19 tweet from Musk — which claimed Tesla would deliver half a million vehicles this year — violated the terms of the earlier agreement. The tweet was misleading, the SEC argued, because Tesla was on track to produce up to 400,000 vehicles in 2019.
Musk corrected his tweet hours later, saying the company’s pace of production would amount to 500,000 vehicles, but Tesla would only produce 400,000 in the calendar year.
A federal judge in New York had ordered the parties to meet over the course of two weeks to settle the matter, but they requested extensions after the initial filing deadline.
Analysts said it was a welcome sign for the company, whose stock closed down 5 percent Friday after Tesla reported a steep $702 million loss and Model 3 delivery issues.
“This removes an overhang on the stock that has been a sideshow,” Dan Ives, an analyst with Wedbush Securities, said in an email. “Tesla has enough bad news on its plate so this removes one headache … with the focus now core demand and profitability.”