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Stocks deviated from the relevant market Trading patternsleaving investors wondering if something else is going on with the automaker’s stock.
Tesla stock (index: TSLA) fell 7% on Wednesday. As trading begins Thursday, shares are down more than 17% over the past week, a larger drop than the broader market. The
Both are down about 8% over the same period. Concerns about the crisis in Ukraine and the Federal Reserve’s move toward tighter monetary policy have weighed on the stock market.
But there appears to be something else worrying investors. CEO Elon Musk appears to have picked another fight with the Securities and Exchange Commission. Musk expresses his displeasure on Twitter, where he has more than 74 million followers.
On Tuesday, Musk responded to a Twitter post linked to an article that claimed the SEC had leaked information regarding its investigation of the CEO. Musk said, “This is just peeling the first layer of rotten onions. Stay tuned…”
Musk’s Twitter post came days after a lawyer representing him sent a letter to Judge Alison Nathan in the Southern District of the United States alleging that the Securities and Exchange Commission was “seeking retaliation against my clients for exercising their First Amendment rights.” The three-page letter, dated February 21, Reviewed by Baron.
Then, on Wednesday, Musk took to Twitter again, saying he didn’t start a fight with the Securities and Exchange Commission, but he will.finish it. Another post that suggested the Securities and Exchange Commission is colluding with hedge funds was also responded to with the wordexactly. “
The SEC declined to comment on the tweets. Tesla did not respond to Baron Comment request.
“In the moment of risk-taking, Musk’s antics are worrying investors,” said analyst Wedbush Dan Ives Says Baron. “The SEC issue is a huge problem, but in the end, Musk created this situation himself and his lack of awareness of the situation with the first war in Europe since World War II and investors deeply worried.” Ives is Tesla’s bull, buying voting shares. His price target is $1,400 per share.
Investors don’t like distractions. The problems with Musk, Twitter, and the SEC are just those. Tesla stock is down 3.4% in early trading Thursday, at about $738 a share. The
It fell 2% as markets around the world were floundering in response to Russia’s attack on Ukraine.
Write to Al Root at [email protected]