A settlement was reached between Elon Musk (photo ©Dan Taylor / Heisenberg Media) and the Securities and Exchange Commission (SEC), the authority that monitors the US stock market, which put an end to the fraud investigation that began after the businessman declared on Twitter that he wanted Tesla to go private and already secured the funding to do it. Musk will resign as Tesla Chairman and will not be able to hold that position for at least 3 years. Also, he and Tesla will pay a $20 million penalty each.
It all began on August 7, 2018, when Elon Musk published a tweet stating that he was considering taking Tesla private by paying $420 per share, adding that the funds were secured. The point of such a move was to eliminate the pressures caused by the need of a publicly traded company to obtain profits to prevent their share value from falling.
The delays in the delivery of the Model 3, Tesla’s new electric car, created serious problems with big losses. Elon Musk has always pursued long-term plans but even in the best cases he tends to achieve the promised results well beyond the announced schedule. It happens when you work with innovative technologies that need to be developed and there may be problems but for a public company that creates big pressures. In a private company, the owners can determine on their own the timeline for research and development, accepting losses in the short and medium term.
The SEC didn’t exactly appreciate Elon Musk’s announcement, claiming that he lied or at least his announcement was devoid of solid foundations and was an attempt to to give Tesla an advantage. In recent days, various rumors spread about a possible settlement and then Musk’s intention to face a legal battle, but in the end a settlement was signed.
Elon Musk agrees to resign as Tesla Chairman and will not be able to hold that position for another three years, but will retain the company’s CEO. Two new independent directors will be nominated for Tesla’s board. Future Musk’s communications will be overseen by a new independent committee. Musk and Tesla will pay a $20 million penalty each.
Since the beginning of this story, the comments have been mixed: Elon Musk is a controversial man, like all those who have a certain vision and follow it without being interested in problems they consider petty. His activities are changing a number of markets and have already heavily influenced the aerospace industry with SpaceX, Tesla’s activities with the addition of ex Solarcity’s with solar panel systems or even the solar roof with batteries to accumulate the unused energy, are influencing other markets.
For this reason, there are people who are glad that Elon Musk got smitten while others openly call for a conspiracy by competitors who lobbied hit a company that is bringing progress that puts them in a bad light and above all risk eroding their profits. This story developed in a very public way so everyone can make their own opinion.
