Elon Musk and the SEC
It was September 27th that we first heard that the SEC (Securities and Exchange Commission) was suing Elon Musk, now a settlement has been reached. According to The New York Times, Elon Musk will step aside as chairman of the board for 3 years and both Elon and Tesla will pay hefty fines in the amount of $20 million each.
It all began on August 7th when Elon Musk tweeted:
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
Investors panicked and the SEC took note. By the end of August it was clear that no deal had been reached. According to the SEC “Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source.” During this time stocks fluctuated in sync with available information. For example, when the original tweet went out, Tesla shares suddenly rose by 11% and when plans to take the company private were abandoned on August 27th, shares fell by 5%. Therefore the SEC took action to reprimand both Elon and Tesla for allowing the tweet, based on laws governing the intentional manipulation of stocks. Ironically, since the announcement by the SEC, Tesla shares have plunged 14% and rebounded by 17% amid news of a settlement agreement.
Though the SEC and Tesla have reached an agreement, it is not written in stone. A federal district judge is reviewing the settlement and has asked both parties to submit an essay explaining their decisions. The essay is due by October 11th.
Tesla Model 3 News
Production is finally ramping up for the Model 3. Tesla announced that it delivered 55,843 Model 3s in the 3rd quarter. Though this is clearly a vast improvement, Tesla is still falling short of their profitability goal and will likely need to seek financial support by 2019. As of now the Model 3 is the 5th best selling EV in America, not bad for a newly established electric car company. Want to watch the Model 3 in action? Check out the clip below!