Some public figures apparently love to hear the sound of their own voices … on Twitter! And often tweet without thinking or media coaching. Once again, a public figure is facing backlash after tweeting. The Securities and Exchange Commission (SEC) asked courts to hold Elon Musk in contempt of a settlement ruling imposed in August of last year for fraud on his public musings of taking his company private.
The ruling was intended to prevent the Tesla CEO from revealing material information about the company to investors on social media. Per the ruling, Tesla and Mr. Musk were each fined $20 million. The CEO was also forced to give up his position as chairman.
This time, Mr. Musk tweeted information without his board’s approval about the number of cars the company will produce this year which would affect Tesla’s stock price.
Shortly after the tweet prompted the SEC to take action against Mr. Musk, Tesla stock went down about 2.5%. As a result, many have taken to criticizing him on social media.
“Musk is on a self-destructive path,” said Stephen Diamond, an associate professor of law at Santa Clara University. “He’s the controlling stockholder but he’s not respecting the rights of other shareholders.”
It’s difficult to understand what motivated Mr. Musk’s action. His disrespect for the SEC is public knowledge but the harm that he can do to his company is also obvious.
The key takeaway of Mr. Musk’s online incidents is that social media matters. This is especially true for public figures constantly under scrutiny, but applies to everyone else on social media sites, as well. One never knows who may be listening!