Published: Sun, September 30, 2018
Markets | By Josh Butler

Elon Musk Out as Tesla Chairman After SEC Settlement, Remains CEO

Elon Musk Out as Tesla Chairman After SEC Settlement, Remains CEO

"If Elon Musk resigns or is not the CEO, Tesla is a fundamentally different company that is less attractive to us", said Ross Gerber, chief executive officer of Gerber Kawasaki in Santa Monica, California, which holds Tesla stock.

Musk's fortune dropped by $1.5 billion Friday in NY, the day after the Securities and Exchange Commission accused the Tesla Inc.

"Musk calculated the $420 price per share based on a 20 percent premium over that day's closing share price because he thought 20 percent was a "standard premium" in going-private transactions", resulting in a price of $419, according to the lawsuit, which was filed in U.S. District Court in Manhattan. He has 45 days to relinquish his chairman title. The deal reportedly would have also required Tesla to add two independent directors to its board.

On Aug. 24, after news of the SEC probe had become known, Musk blogged that Tesla would remain public, citing investor resistance.

The first and most obvious was Musk's continued use of Twitter, where he posted the "funding secured" tweet that got him into hot water with the SEC.

It's all to do with his notorious August 7 tweet, relayed to his 22 million Twitter followers: "Am considering taking Tesla private at $420. As citizens of planet earth, we must show our support for innovation, for attempting to create a positive future, and for our fearless change agent of the world, Elon Musk", the shop description says. These complaints are notable because they express numerous same concerns regarding Musk's actions as the SEC's lawsuit, providing a snapshot of the overwhelming frustration felt by small investors with Musk, as well as an overall concern that the American financial system places individuals at a stark disadvantage.

Yesterday we brought you the news that Elon Musk is actually getting charged with fraud by the SEC over misleading statements the Tesla Motors CEO made in August.

Experts say Trump's United Nations speech indicative of zero-sum worldview
Abe and Rouhani, meanwhile, agreed to cooperate in denuclearizing North Korea, according to the Japanese official. In his address previous year to the UN, Trump insulted Kim as a "rocket man" bent on nuclear destruction.

Musk denied the charges, saying in a statement, "This unjustified action by the SEC leaves me deeply saddened and disappointed".

The Securities and Exchange Commission filed a lawsuit against TeslaCEO Elon Musk on Thursday, alleging the billionaire made "false and misleading statements" about taking the company private. "In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source", the SEC said in the complaint filed in federal district court in the Southern District of NY.

Musk, 47, is the public face of Tesla, and has driven it to the verge of profitability with a costly ramp-up of production of its Model 3 sedan over the past year.

Musk has hired Stephen Best at Brown Rudnick, who successfully defended internet billionaire Mark Cuban in an insider trading case, according to people familiar with the plans who also asked not to be identified.

Tesla shares were down 13.9 percent at the close on Friday, at $264.77.

Since Musk so far has chosen to fight this, it could take years to reach an outcome, said Bernstein analyst Toni Sacconaghi in a note Friday.

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