1/ Time for a procedural recap on SEC v. Musk, since I get a lot of questions and comments when I Tweet about the settlement, which is now on life support. $TSLA.
2/ The SEC filed a lawsuit against Musk in federal court. Among other remedies, the SEC complaint sought a full officer/director bar against Musk. The SEC and Musk signed a settlement agreement, filed that agreement with the court and asked the court to approve it.
3/ The court asked for a letter from the parties justifying the settlement, due Thursday. Absent Musk's Twitter meltdown, the court would have likely approved the settlement, and issued an order requiring Musk to comply with the agreed remedies. Case would've been closed.
4/ Musk clearly breached the settlement when he melted down on Twitter (Shortseller Enrichment Commission, etc.). He publicly indicated that he thinks the SEC case against him is unjust. The SEC cannot and will not allow this to stand.
5/ The SEC will almost certainly take the position that Musk breached the settlement and will take the position that it is null and void. They will notify the court that Musk breached the settlement and that the SEC no longer supports it.
6/ Most likely, in my view, Musk will not dispute this. Otherwise, Musk would be in the odd position of trying to tell the court that it needs to approve a settlement that the SEC no longer supports, and that Musk was publicly disparaging only a few days before.
7/ In any case, Musk would lose, if he tried to enforce the settlement. He breached a material term of the settlement and thus lost the right to enforce it. As a result, the SEC lawsuit will be back on, seeking a full officer and director bar, likely in the next few days.
8/ Last time the market realized Musk was at risk of getting booted out of his Tesla CEO role by the SEC lawsuit, the stock dropped $43 in a day. <end of thread.>
