Tesla shares dropped 5 percent Friday, a day after CEO Elon Musk sent out a tweet that appeared to mock the Securities and Exchange Commission, with whom Musk is trying to settle allegations of fraud.
Musk sent the tweet hours after the judge handling his settlement agreement with the SEC ordered both parties to explain why the court should approve it.
Musk and Tesla each agreed to pay separate $20 million fines to settle allegations that Musk misled investors in early August by tweeting that he had “already secured” funding to take Tesla private. As part of the settlement, Musk will step down as Tesla’s chairman for three years but will remain CEO and retain a seat on the board. The deal also requires that Tesla put in place a system for monitoring Musk’s public communications about the company, including his tweets.
Tesla was not immediately available for comment. The company’s stock has been volatile throughout much of 2018 and is down more than 12 percent this year. It reached a 52-week high of $387.46 on Aug. 7 when Musk tweeted his plan to take Tesla private. The stock fell as low as $260.56 the day after the SEC filed charges against him, and then climbed as high as $311.44 on Monday, two days after the parties agreed to settle.
As of Friday morning, shares were trading at about $268.