In a note to investors on Tuesday, Wedbush Securities analyst Dan Ives said that the SEC’s request on Monday to place the Tesla CEO in contempt for a tweet he sent out last week creates a “tornado of uncertainty” for Tesla shares. He called the SEC’s move “a near-term overhang on shares until investors can better gauge the impact.” And Ives is ultimately concerned that it’s “another distraction for Musk & Co.”

Tesla shares (TSLA) were down $7.77, or 2.6%, to $291 in pre-market trading on Tuesday.

The SEC’s action was filed on Monday night and centered on a tweet Musk published on February 19, saying “Tesla made 0 cars in 2011, but will make around 500k in 2019.” In an agreement Musk signed with the SEC last year for floating a possible Tesla buyout that never came to fruition, he agreed to have approval of any tweets that might be “material” to the company’s shareholders. Musk allegedly failed to get approval for last week’s tweet and the SEC apparently believes it was material, or could affect shareholder value.

It’s unclear what the SEC’s contempt request could mean for Musk and Twitter. And it’s that uncertainty that Ives said, Tesla doesn’t need.

Still, even with the SEC lurking, Ives is most concerned with Tesla ramping up sales in Europe and China, he told investors. And if Tesla can address those two areas, he believes the company will be poised for growth.

Ultimately, Ives thinks Musk and Tesla will weather their latest storm and is maintaining his “outperform” rating. He set a 12-month price target on Tesla shares of $390.