Shortly before he is due in court to defend himself against contempt charges from the SEC, Tesla CEO Elon Musk has stated that the decision to hold a private teleconference where important Tesla news was revealed was a “mistake.”
The LA Times reports that ahead of Tesla CEO Elon Musk’s appearance in court to defend himself over contempt charges by the SEC, the CEO has said that a private teleconference in which key information about Tesla was revealed was a “mistake.” Last Thursday, Tesla held a semi-private teleconference in which select investors and members of the media were given important information about the company, now it appears that Musk regrets this move.
It was during this call that Musk revealed plans to close Tesla’s retail stores and announced a new $35,000 version of the company’s Model 3 vehicle. Members of the call were instructed not to record it, and Tesla stated that there would be no transcript of the call. Many supporters of Tesla were even surprised by this, such as Tesla fan and shareholder Galileo Russell who tweeted: “Why was there a press call about the $35K model 3 that was closed to the public (and shareholders!!) w/ no transcript released. super frustrating for long-term supporters. Completely goes against democratization of information and financial markets.”
Replying to Russell, Musk tweeted: “Tesla comms is fixing. That was a mistake.” Many wondered whether the private teleconference call was a violation of SEC disclosure rules referred to as Regulation D. University of Delaware finance professor Charles Elson said that the conference call may not be a violation but that given Musk’s upcoming hearing, it’s not a good look: “I’m not saying whether it’s a violation or not, but any controversy on Reg D doesn’t help in a contempt hearing,” said Elson.
Tesla is facing a tough time recently, the company announced plans to cut 81 more jobs at its Fremont production facility, bringing the total number of layoffs at the factory to 883 this month alone. Tesla also reportedly plans to cut four more jobs from its Lathrop facility, bringing the number of layoffs at that location to 141.
Tesla recently announced a $35,000 Model 3 vehicle leading many analysts to worry about the possibility of a shrinking profit margin on Tesla vehicles; while Tesla also announced that it would be closing its global retail store network and planning to only sell vehicles online. The company then announced a new SUV vehicle titled the Model Y, which has led many analysts to question the demand for Tesla vehicles.
Tesla stock has dropped in recent weeks, currently trading at $276.51 at the time of the writing of this article.