The tweet set into action a course of events that would cost him a great many things. He’s lost his chairmanship of the Tesla board, a position he had held since before he was CEO. (He’ll still be chief executive, though.) It cost him $20 million—or $2.2 million per word—and Tesla, of which he is the largest shareholder, another $20 million. (Tesla’s violently fluctuating stock is still far below what it was before the fateful day, so the final amount lost for both man and company could be much greater.) One might say it cost him his girlfriend, whom he unfollowed 12 days later, but hey, there was a lot going on.
But most importantly, they might have cost him his power to tweet such ridiculous, reckless things—or to tweet unsupervised at all.
In addition to forcing Musk to step down from his chairman role of Tesla, the SEC is mandating the company add two independent board members and establish new communications protocols that oversee his communications. This likely means that he will need approval for all his Tesla-related tweets.
According to the terms of settlement released on Saturday, Tesla is required to “put in place additional controls and procedures to oversee Musk’s communications.” Stephanie Avakian, co-director of the SEC’s Enforcement Division, said the remedies were aimed at “strengthening Tesla’s corporate governance and oversight in order to protect investors”—in other words, Musk tweets are so explosive that shareholders need legal protection from them. (The part about protecting Musk from himself is implied.)
It’s not clear what exactly these patronizing “controls and procedures” will look like, but there’s no doubt they will apply to his Twitter feed, considering this was the medium responsible. It’s likely Musk will have to run all his tweets past his overseers—not unlike the “Twitter committees” used in government, a protocol the SEC itself uses, according to a Wall Street Journal explaining the levels of review government tweets traditionally go through: “Write, Review, Edit, Seek Approval, Wait, Edit, (Maybe) Send.” (Right now, White House staffers are no doubt wondering what on earth they have to do to get an SEC enforcement for Trump’s America-related tweets.)
Whatever form they take, these controls are a rather light punishment, in the scheme of things, for what the SEC is calling fraud. Without this settlement, Musk risked losing his position as Tesla CEO, not to mention being barred from serving as CEO or chairman of any public company for a set period of time. But for Musk—Mr. “Hello, have you met the Internet?”—a Twitter timeout might just be the greatest punishment of all.
Though Tesla couldn’t possibly have written a protocol already, the order seems to be working: As of writing, Musk has not tweeted anything about Tesla since the settlement was announced on Saturday. He did, however, tweet the video for Naughty By Nature’s “O.P.P.”—a song about being down to engage in sexual activity with “Other People’s Pussy/Penis/Property”—at 1:22 a.m. Monday. Such a tweet raises the question: Which communications will need oversight? Forbes suggests that Musk will need approval for “Tesla-related tweets,” but he is so synonymous with his brand that it’s impossible to separate the two. When Musk tweets about measuring the Gigafactory in units of hamsters, is that a Tesla-related tweet?
Or when he makes juvenile jokes about how the Model 3 looks like a naughty word (or about “unveil[ing] the D”), is that a Tesla-related tweet?
Likewise, when Musk tweets about time-traveling aliens—“Why did we waste so much time developing silly rockets?”—is that a SpaceX-related tweet? When Musk tweets random thoughts that pop into his head, like that he is going to build a tunnel boring machine, are those work-related tweets? One would argue yes, considering his record of follow-through.
In a sense, every Musk tweet is a Tesla-related tweet. The eccentric entrepreneur is so tied up in the company that “even the amount of sleep he is getting has the potential to sway the markets,” noted Forbes. When he tweets a totally unsubstantiated allegation that a rescue diver is a “pedo” or publicly bullies female journalists, those 280 characters affect Tesla’s image. As Felix Salmon wrote of the latter, “Musk’s harassment of Lopez is obsessive and deranged, to the point at which it should worry every shareholder of any company where he serves as CEO.”
It’s not clear which topics the protocol will cover, or whether every word we hear from Musk will henceforth be delivered through a Tesla board filter. Presumably, weed will be off the table, meaning shareholders will be insulated from the kinds of stock plunges that followed footage of a red-faced Musk smoking a blunt during an interview with Joe Rogan (nonshareholders will also be insulated from enduring such images). But there’s no doubt investors can breathe a marijuana-free sigh of relief.
Now they just need an SEC settlement to force Musk to get some sleep.