The CEO of Tesla, Elon Musk has mocked the Securities and Exchange Commission by calling the organisation the "Shortseller Enrichment Commission" only days after settling charges of fraud brought against him by the agency.
The stock dropped as much as 3.8 per cent as of 9:40 a.m. Friday in NY, after Musk fired off more than a dozen tweets targeting the Securities and Exchange Commission and short sellers the night before.
The settlement provided for appointment of a new chairman and directors, as well as moves to oversee Musk's output on social media.
Musk has been open about his thoughts on investors who are betting against Tesla known as short-sellers.
Additionally, Tesla's board must implement procedures for monitoring Musk's communications with investors, including on Twitter.
Musk agreed in the settlement to pay a US$20 million fine.
His tweet came as the NY judge overseeing the settlement declined to immediately approve the deal.
Musk is playing with fire (again) as the SEC deal which allows him to stay on as CEO providing he resign the chairmanship and personally pay $20m, with the figure matched from Tesla's coffers, is yet to be approved.
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Musk's latest tweet came after he drew the ire of the SEC over what the regulator called a misleading claim about the electric auto maker's stock price. The tweets resulted in a suit from the SEC against Elon Musk, in which the SEC said some of the tweets were "false and misleading". Tesla stock plummeted on news of SEC action against Tesla but stabilized on the settlement news.
The website description says they want to help Musk with this "preposterous" SEC filing against him.
The SEC, whose @SEC_News Twitter handle has about 251,000 followers to Musk's more than 22.8 million, is also active on the messaging service but has refrained from posting about Musk or Tesla since last weekend's settlement.
She has asked Tesla and the SEC to send a joint letter to explain why the settlement is "appropriate" before she reviews the case.
He said a big problem for Musk is that Tesla would lose too much money targeting a mass audience by selling its Model 3 at a $35,000 starting price, and yet "can't bring himself" to cancel the program and refund customer deposits.
The SEC, Mr Musk and Tesla must file documents later this month to prove the terms are "fair and reasonable".
Shares in Tesla fell more than five per cent in the first hours of trading this afternoon, having already closed 4.4 per cent down yesterday evening.
Another reason for Tesla's decline on Friday is likely hedge fund manager David Einhorn's criticism of the automaker in his quarterly letter to investors.