So I guess it turns out Elon Musk stepping down as the chairman of Tesla and being made to pay a fine of $20 million (£15 million) was actually a pretty chill idea.
How? Well Tesla just outsold Mercedes-Benz in the US for the first time ever. How about them apples Musk, you pesky so-and-so!
His step-down (is that a term?) followed a decision made by US financial markets regulator, the Securities and Exchange Commission (SEC), on September 27, to sue Musk on charges of alleged securities fraud.
The decision stems from a tweet made by the billionaire business magnate on August 7, which falsely suggested he’d secured financing to privatise Tesla for a price of $420 per share.
It’s said to have led to Tesla’s stock price soaring by over six per cent the same day, causing huge market disruption. The subsequent securities fraud complaint led to shares dropping by over 13 per cent in after-hours trading, AKA pretty bad news for the Musk.
Anyway, yeah the boys over at Tesla are crushing it now. In the third quarter this year, they sold 69,925 vehicles in the US, whereas Mercedes-Benz sold 66,542.
According to Artherton Research, Tesla was 1754 units shy of toppling fellow German big-dog, BMW.
Not bad for an electric start-up. Musk would’ve been so proud had he not been apparently ousted from his main position.
Still, the 47-year-old will remain as chief executive officer (CEO) of Tesla, but must resign from his position as chairman for a three-year period.
Tesla will also have to pay a separate $20 million fine for failing to have had preventative disclosure controls and procedures in place.
On October 1, the Musk (doesn’t pack the same punch as ‘the Zuck’ does it?) made a return to social media to let us know he really doesn’t care about the controversy – whether it be calling everyday heroes paedophiles, smoking blunts on The Joe Rogan Experience or sharing O.P.P’s ‘Naughty by Nature’ to his 22.8 million Twitter followers.
His original blunder tweet was made after he’d met with Saudi investors who’d shown interest in Tesla. However, it quickly emerged a deal had not been guaranteed. In the weeks following the tweet, Tesla confirmed they’d be remaining a public company.
SEC chairman, Jay Clayton, made the following statement on the matter:
This past Thursday, after the completion of a thorough investigation and following dialogue with representatives of Mr. Musk and Tesla, the Commission filed an action against Mr. Musk in federal district court. I fully supported the filing of the action.
I also fully support the settlements agreed today and believe that the prompt resolution of this matter on the agreed terms, including the addition of two independent directors to the Tesla board and the other governance enhancements at Tesla, is in the best interests of our markets and our investors, including the shareholders of Tesla.
This matter reaffirms an important principle embodied in our disclosure-based federal securities laws. Specifically, when companies and corporate insiders make statements, they must act responsibly, including endeavouring to ensure the statements are not false or misleading and do not omit information a reasonable investor would consider important in making an investment decision.
Musk now has some 40-odd days to step down as chairman, with a new independent chairman for Tesla set to be appointed.
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