Billionaire Elon Musk should be removed as Tesla CEO because he had the audacity to criticize the Securities and Exchange Commission. That’s the opinion of CNBC host Jim Cramer, who apparently doesn’t believe in free speech.
“This guy’s going to attack the SEC? How about removing him? The guy just attacks the SEC as if it’s funny. So I think he should be removed.”
Cramer was reacting to Musk’s Twitter remark that “something is broken with SEC oversight.”
Musk made the comment in response to a Twitter follower, who asked why the SEC filed a contempt motion over a tweet about Tesla’s 2019 production estimate when it had no impact on Tesla’s stock price.
In contrast, the SEC’s February 25 contempt filing against Musk caused TSLA stock to crater:
“It didn’t move the markets and the SEC complaint did…where is the enforcement committee that protects the small investor from the SEC Enforcement committee???”
This is the tweet that enraged the SEC:
Jim Cramer laughably suggested that Elon Musk should be fired as Tesla’s CEO — not because his tweet hurt Tesla — but because he shouldn’t criticize the SEC. Why? Because “the SEC has dignity,” Cramer says. Oh really?
“I love him. He’s a genius. [But] he should be removed.”
Cramer then joked that Musk should be required to have something on his cell phone that prevents him from drunk-tweeting. Cramer also suggested that Musk “should talk to Siri” if he absolutely needs to blurt out a thought.
As CCN.com reported, Musk has gotten himself into trouble numerous times over errant tweets. The most damaging incident occurred in August 2018, when the South African billionaire flippantly suggested that he was considering taking Tesla private.
Two weeks later, Musk backpedaled, but by then the damage was done.
Several weeks after he sent the tweet, the SEC sued Musk for securities fraud, claiming his post caused Tesla stock to spike 6% that day. Tesla shareholders also got upset when the fallout from the tweet caused TSLA to plunge in the following days.
In September 2018 — a month after he sent the going-private tweet — Musk agreed to pay a $20 million fine to settle the SEC’s securities fraud charge.
He also agreed to step down as chairman and allow a committee to monitor his communications. Basically, Musk needs to get approval from Tesla’s lawyers if he tweets something that is “material” to Tesla investors.
In its latest contempt filing, the SEC claims Musk violated this consent decree:
“Musk did not seek or receive pre-approval prior to publishing this tweet, which was inaccurate and disseminated to over 24 million people.”
“Musk has thus violated the Court’s Final Judgment by engaging in the very conduct that the pre-approval provision of the Final Judgment was designed to prevent.”
The Securities and Exchange did not specify what type of punitive measures it will seek if Musk is found in contempt.
However, the agency previously tried to get Musk removed as CEO. But that’s not up to the SEC. The decision to remove Musk can only be made by Tesla’s board of directors or a judge.
Despite the SEC’s saber-rattling, Tesla’s board is unlikely to oust Musk. He is too integral to Tesla’s brand and corporate identity.
While the business community is often flummoxed by Musk’s mercurial personality, Tesla shareholder Cathie Wood has no problem with it.
Wood, the CEO of ARK Invest, says people just need to get used to Musk’s flighty demeanor.
Everybody is beginning to adjust for Musk,” Wood said. “Having been a portfolio manager for many years, I know how to adjust to what different CEOs say, given their personalities and their aspirations.”
Despite Musk’s recent troubles, Wood says the sky’s the limit for Tesla. So buckle your seat belts.
Last modified: July 2, 2020 7:31 PM UTC