Tesla Falls On Double Blows Of Vehicle Recall, SEC’s Criticism By Investing.com

By Dhirendra Tripathi

Investing – Tesla (NASDAQ:TSLA) shares fell more than 3% Wednesday, bearing the brunt of two adverse developments.

First was its recall of nearly 6,000 vehicles over concerns that their brake caliper bolts might loosen, which could result in a loss of tire pressure.

The recall covers certain 2019 to 2021 Model 3 vehicles and 2020 to 2021 Model Y vehicles, Reuters said.

Tesla’s filing with the National Highway Traffic Safety Administration said it had no reports of crashes or injuries related to the issue and that the company will inspect and tighten, or replace, the caliper bolts as necessary.

In the other development, according to a report by The Wall Street Journal, the SEC told off Tesla for CEO Elon Musk’s “use of Twitter.” The agency said Musk’s tweets have violated the terms of the settlement agreement that required Musk to get his tweets preapproved by company lawyers.

Musk is prolific with his tweets and has more than 56.3 million followers on the social media platform. His Twitter posts can wildly move prices of tradeable assets, from those of cryptocurrencies like Bitcoin (BitfinexUSD) and Dogecoin DOGE/USD to listed companies like Samsung (KS:005930) Publishing (KS:068290).

The battle with the SEC dates to 2018, when Musk would often comment on the Tesla share price, causing wild fluctuations. In a settlement reached with the regulator, Musk stepped down as the carmaker’s chairman and was replaced by incumbent Robyn M. Denholm.

But the compulsive tweeter in Musk remained undeterred. It may not entirely be Musk’s doing that people look out for his tweets to place their bets on asset prices and look for directions on various topics but given that he has a disproportionate influence on his social media followers, SEC stepped in again.