Tesla just undermined Elon Musk's defense against the SEC, JPMorgan says

Tesla just undermined Elon Musk's defense against the SEC, JPMorgan says

Tesla also said it only delivered 63,000 vehicles in the quarter, down 31% from 2018′s fourth quarter.

"Full year delivery guidance was stated in the release to have been "reaffirmed" at the prior level of 360-400K units, in our view undermining a key tenet of CEO Elon Musk's legal defense against the SEC", he wrote. But Tesla's history of missing Musk's ambitious projections may make it hard to have confidence in the outlook, he said.

The billionaire tech entrepreneur could be seen pacing in the security line at the downtown Manhattan federal courthouse ahead of a 2 p.m. contempt of court hearing before Judge Alison Nathan.

Musk had surprised investors in August by tweeting that he was considering taking Tesla private at $US420 ($A590) per share and had funding secured.

Musk's lawyers countered that the earlier tweet contained nothing new, and that the SEC had conceded during settlement talks that Musk did not need pre-approval for all tweets about Tesla.

"Tesla's 1Q19 vehicle production & deliveries report was substantially worse than expected", said Ryan Brinkman, a J.P. Morgan analyst who had been waiting for the automaker's announcement following the end of its first quarter in 2019.

The lawyer, Cheryl Crumpton, said the SEC would ask that Musk face further sanctions and greater fines for any future violations if held in contempt, but stopped short of recommending that he face removal from Tesla's board or helm. The courtroom appearance doesn't seem to be doing Tesla any favours as, combined with news of the company's biggest sales drop in its history, the auto maker's stock dropped 8 per cent on Thursday. Musk said in February that the company would likely dip back into the red for this quarter - a departure from his previous statements about the company's continued profitability - as it expanded into Europe and China. The SEC determined that the initial tweet was not approved by Tesla before it was sent, according to the filing.

As he prepared to enter the courthouse, Musk told reporters: "I have a great respect for the justice system".

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