Economy

Tesla stock soars as Musk taunts the SEC with a tweet

Tesla stock soars as Musk taunts the SEC with a tweet

Amid a slew of controversies surrounding Tesla CEO Elon Musk, there comes some good news for the electric-car company's investors and staff as the tech billionaire has now said that the company is close to achieving profitability.

So they sued him, dropping the company's stock by 14% (that's more than $7B in shareholder value) - Musk himself reportedly lost $1.6B in a single day.

Elon Musk will give up the role of Tesla Inc. chairman and pay a $20 million penalty to settle fraud charges brought by the United States over his claims about taking the company private.

On August 7, Mr Musk, chairman and chief executive of Tesla, the $53 billion carmaker, announced on Twitter that he had "funding secured" to take the company private at $420 a...

Musk allegedly tweeted "considering taking Tesla private at $420".

Sunday marks the end of the third quarter, and Tesla has frantically pushed to boost deliveries before the period ends.

Besides the settlement news, Tesla has another milestone this week.

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The deal could remove one cloud that hangs over Tesla. Likewise, Tesla will pay another $20 million due to its failure to check whether Musk's announcements complied with the law.

"The stock was down so much on Friday because it was unclear if he would remain with the company at all given what the SEC was pushing for", said Garrett Nelson from CFRA Research.

The company has recently been struggling to meet audacious production goals for its Model 3 sedan.

Musk has agreed to pay out the $20 million fine.

Evan Niu, CFA owns shares of Tesla. In addition, Tesla agreed to appoint two more independent directors to its board, and exercise more control over Musk's statements on social media as well as via more traditional channels of corporate information.

The settlement will stand post a court approval in which Tesla and Musk neither admit nor deny the charges levied by the SEC. At stake was the idea that Elon Musk's intention was merely speculative. The SEC also filed papers that charged Tesla with failing to exercise proper oversight over Musk's actions and laid out a separate settlement of those charges.


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