Why Tesla stock jumped 5% today

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Tesla car driving on road

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of Tesla (NASDAQ: TSLA) popped more than 5% on Wednesday after Reuters reported CEO Elon Musk as having filed an appeal to end his 2018 agreement with the Securities and Exchange Commission (SEC) over his Twitter posts. 

Meanwhile, an analyst just forecast stronger days ahead for the electrical vehicle (EV) manufacturer.

So what

After the SEC filed a lawsuit in 2018 alleging that Musk defrauded investors through “false and misleading statements” on Twitter about having secured sufficient funding to take Tesla private, Musk and Tesla entered into an agreement with the regulator. As part of the settlement, Musk stepped down as Tesla’s chairman, and Tesla and Musk agreed to pay $20 million each in penalties while also agreeing to have the CEO’s tweets about any material business information screened by a lawyer before posting on the social media platform.

The SEC later sought a probe and subpoenaed documents, though, causing Musk to accuse it of harassment and undermining his constitutional right to free speech. Earlier this year, he sought to end the decree to get his tweets vetted, but a U.S. district judge quashed his efforts in April.

Musk isn’t relenting just yet, though. This morning, he appealed the judge’s refusal, and will ask the 2nd U.S. Circuit Court of Appeals in Manhattan to overturn the judge’s decision, according to Reuters.

Now what

As long as the decree stands, Musk and Tesla will continue to face noncompliance and other legal risks. Musk’s latest appeal shows his firm intent to end the decree and the legal overhang on Tesla.

Meanwhile, Mizuho analyst Vijay Rakesh reiterated his buy rating on Tesla stock this morning, saying he believes the company should benefit as China eases COVID-19 lockdowns and sales of EVs pick up globally. Retail sales of new-energy vehicles in China surged almost 91% year over year in May, according to data from the China Passenger Car Association.

Tesla has other challenges to tackle right now, but with analysts projecting a strong recovery in the global EV market for the second half of 2022, investors found a good reason to turn bullish about the stock today. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock jumped 5% today appeared first on The Motley Fool Australia.

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More reading

Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla and Twitter. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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