Musk and Tesla will pay $20 million each, bring in two independent directors and have the billionaire step down as board chairman to settle U.S. Securities and Exchange Commission charges that Musk misled investors by tweeting he had financing for a go-private deal.
Tesla made its biggest gain in five years Monday after company founder Elon Musk reached a settlement with securities regulators that will allow him to stay on as CEO of the electric auto maker.
As part of the settlement, the company will appoint a new independent chairman, two independent directors and control Musk's communications.
The settlement will stand post a court approval in which Tesla and Musk neither admit nor deny the charges levied by the SEC. The shares closed at $307.52 on Thursday before the SEC announced its enforcement action over the tweets, in which Musk said he had "funding secured" to take the company private at $420 a share.
But the key outcome is that Musk gets to continue as CEO, and in the role that as the visionary, evangelist and, well, the driver and inspiration to develop new products, new strategies and plot the end of the fossil fuel era.
Musk, whose tweets on August 7 on a plan to take Tesla private that was later abandoned, has been barred from tweeting about Tesla without the permission of a company lawyer.More news: Third woman accuses Supreme Court nominee Brett Kavanaugh of sexual misconduct
Given said controversies you might have thought Musk would be keen to keep a low profile, especially with him having lost his job over his cavalier remarks.
The company's production and delivery numbers for the quarter are yet to be announced, but estimates, including those from Tesla's staunchest critics from Wall Street, are high that the company has achieved its target of manufacturing and delivering more than 50,000 Model 3 in the third quarter.
The board includes includes James Murdoch, son of Rupert, and an Australian businesswoman, Robyn Denholm, who is being touted as a possible successor to Musk as chair of the board. Whether Tesla made a profit likely will not be known until it reports financial results for the quarter.
Elon Musk is confident that Tesla Inc.
The company said on Tuesday it missed its production target of 6,000 Model 3s by 700 cars in the final week of September and outlined hurdles it faced due to the worsening of President Donald Trump's trade war with China.