Home
News
- Elon Musk has a love-hate relationship with the US SEC when it comes to his tweets about Tesla, cryptocurrencies like Bitcoin and DOGE and solar roof production
- Tesla and the owner have been fined $40 million for committing a securities fraud that included indirectly manipulating the company share price
- SEC must have taken note about his recent tweets on cryptocurrency and Bitcoin in particular as they had a massive impact on price
Billionaire entrepreneur Elon Musk, would want to have an amicable relationship with the country’s regulatory authorities. Moreover, a creative one would not like to cross the line even once but Elon has his own understanding regarding the same. He has crossed the line not once but twice and may be for the umpteenth time this year with tweets regarding cryptocurrency. He might think Twitter is his backyard but fails to understand that it is shared with the SEC. His tweet about Tesla going private in 2018 led him to lose the post of chairman in the company.
Here’s a lowdown of what’s been happening
Elon had tweeted in 2018 that Tesla was in talks with a group of investors from Saudi Arabia and planned to take it private. Not only that but the owner also stated that the price quoted for the same was $420 per share. In hindsight we may not know what actually went down but it did disturb his relationship with the US Securities and Exchange Commission. Subsequently, it sent the share price soaring, imposition of hefty fines on Tesla and Elon for securities fraud committed and losing the chairman’s post as well.
The settlement terms also mentioned that he must verify his tweets with the company’s lawyers before publishing them. He tweeted about the numbers regarding solar roof production which was also in contempt of court order. The company testified that they were mere aspirations of the owner. Furthermore, Elon exclaimed on social media that Tesla’s stock price was too high last year in May. The tweet eroded $13 billion of Tesla’s market capitalization. Astonishing!
Recent crypto tweets
The tweets that followed the privatization gimmick irked the SEC as they went against their terms and conditions. The initial and the revised agreement were not adhered to by Elon Musk and thus leading to SEC admonishing him. Although they might be his thoughts or desires, they had a massive impact on the financial ecosystem both at the company level and country wise.
The Twitterati went berserk when Tesla announced that it would accept payment in cryptocurrency. It did send the price of Bitcoin and other cryptocurrencies soaring. However, within months the entrepreneur-cum-twitter-sitter retraced his comments and declined to accept payments in digital currencies. The world’s famous cryptocurrency, Bitcoin, shed nearly 37% of its value in May itself, partly owing to the Tesla owner’s tweets.
The love triangle
Tesla, Elon and the SEC are in a complicated love triangle, so to say and wary of each other. Recent correspondence has shed light that Tesla and Musk were notified by the SEC in 2019 and 2020 in contempt of their agreement. However, the electric car maker thought that they had agreed to disagree.
Elon’s twitter musings in 2018 cost the company and himself $40 million in fines. We are at the same juncture this time around as retail investors in cryptocurrency were beaten to death with the high volatility in its prices. The SEC may come scathing down on the entrepreneur who has a following of 54 million users on Twitter. To put it in context, Tesla’s share price touched $1,371 in mid-July 2020.
Elon, the cryptomaniac users are aware of
At one point of time, The Boring Company founder likened cryptocurrencies that every tweet of his about a particular digital currency would send the prices soaring. His tweet about sending Dogecoin to the moon shot the price of the meme currency out of the park.
He loved them, soon endorsed them and alienated cryptocurrencies as they were harmful for the environment. It goes against his company’s view of creating a sustainable ecosystem with the use of solar and renewable forms of energy.
Investors have reacted to every crypto tweet by him, emotionally and financially. He assured fellow crypto maniacs that his crypto investment worth $1.5 billion was intact after he sent signals about liquidating it. It caused panic among market enthusiasts and new entrants that took the crypto boat ride. The price of Bitcoin fell down to $30k which is a February low and just after a month of touching a high of $62k in May.
Bitcoin value 300% higher than last year
Even though Elon’s tweets sent the prices spiralling down, it has not lost value as compared to last year. Extreme volatility is an innate characteristic of cryptocurrencies as they do not have an asset to back them. Furthermore, regulations in China for mining and trading while reporting impositions in the US have hurt sentiments and thus a positive effect on volatility.
Post hurting sentiments, investors came up with a new coin and termed it $STOPELON. They have a new use case against the Tesla owner and want him to stop maneuvering the crypto prices from the comfort of his home.
It was just last month that Tesla published a video wherein Elon was seen giving valuable tips about how to go invest in cryptocurrency. He highlighted the nature of the asset class and cautioned investors from placing all their life savings on one single bet. The future for cryptocurrencies is bright at the moment as retail and institutional investors have found a medium to diversify their investments further.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
