Elon Musk Rejected Tesla SEC Settlement at Last Minute


Tesla plunged as much as 14 percent in early trading Friday after the U.S. Securities and Exchange Commission alleged that Musk committed fraud by tweeting last month that he'd secured funding to take the company private. Many have sent out an ill-advised tweet at least once in their lives, but Musk's joke about taking Tesla private at $420 a share could get him removed from the company.

Tesla has always weathered these storms, and its continued ability to stay afloat amid these challenges is enough to convince many that the electric vehicle company will be around for a while yet.

Some analysts said the SEC's action was the beginning of a legal battle with authorities, short-sellers and other investors over Musk's actions that could cost Tesla heavily.

Things are not going too well for Elon Musk.

The charges against Musk all stem from his decision on August 7 to tweet in the middle of day trading that Tesla was set to undergo a major change, writing: 'Am considering taking Tesla private at $420'.

He said the share price is now "more faith-based" than rooted in the company's financial performance. On Thursday, he released a statement calling the SEC lawsuit "unjustified" and said, "I have always taken action in the best interests of truth, transparency and investors".

The $420 share price Musk set for the take-private deal, SEC investigators said, was itself a weed reference created to impress his then-girlfriend, the synth-pop musician Grimes.

Barclays has warned that if Musk is forced to leave, it will send Tesla shares down another $130 - or 48 per cent from their current level. "The problem for investors is that an investment in Tesla is an investment in Elon Musk", he said.

More news: President Trump calls Kavanaugh testimony 'riveting'
More news: Paul Pogba 'sparks 25-man hunt for missing earring'
More news: Men: First Official Dark Phoenix Trailer Rises From the Ashes

Over the past 24 hours, Elon Musk has been the subject of heavy public spotlight thanks to a lawsuit that accuses the billionaire of defrauding stockholders with said Tweet.

Some analysts are concerned about what Musk departure could do to Tesla's stock.

The SEC couldn't resist at minimum making an example of Musk.

Hey you! We want to know what you think about The Outline (and you can win some cool swag too).

In a previous fraud case over blood-testing firm Theranos, the Justice Department brought criminal charges three months after the SEC announced its settlement with the company's founder Elizabeth Holmes. Johnson believes Musk's ability to inspire investors with a vision of a brighter future has blinded them to the "horrendous" fundamentals at Tesla. This may give the board the backbone to put Musk in a visionary role.

'The ball is in the Board's court now and it remains to be seen what will happen next, ' he said.

For the billionaire entrepreneur, it was the latest self-inflicted wound from a series of auto crashes that have battered Tesla's share price and Musk's reputation. It's possible that Mr. Musk fights and wins this case.