Elon Musk’s SEC Settlement Is Sending Tesla Shares Through the Roof
The news of Tesla CEO Elon Musk settling with U.S. financial regulators sent the company’s stock soaring Monday morning.
The electric car firm’s shares were up more than 15% in pre-market trade in the U.S., and up almost 13% in Germany.
The rise pretty much makes up for the losses suffered Friday, after the Securities and Exchange Commission (SEC) officially sued Musk over his tweet about having secured funding for a plan to take Tesla private. The funding had not been secured.
On Saturday, Musk settled with the SEC. He and Tesla will pay $20 million each, and the company will have to find an independent chairman to replace Musk, who will stay on as CEO. Tesla will also need to bring a couple more independent directors on board.
However, the Justice Department is still probing Musk’s tweets, and lawsuits by investors and short-sellers over the false information are also still ongoing.
Many see the forced changes as being positive for Tesla, partly because the mercurial Musk will now have someone to answer to, and partly because his reduced role may allow the chronically overworked CEO to focus more.
Over the weekend, Musk emailed his staff to tell them to “ignore the distractions” and to claim that Tesla is “very close” to finally becoming profitable.
Sunday was also the end of the latest quarter, and Tesla has been working flat-out to break a delivery bottleneck that stemmed from increased production capacity.