Monday, 21 January, 2019

Elon Musk got $1.7bn richer on Monday

Elon Musk bowed to demands from America’s financial markets watchdog to give up his position as chairman of Tesla Elon Musk bowed to demands from America’s financial markets watchdog to give up his position as chairman of TeslaBOBBY YIP REUTERS
Nellie Chapman | 02 October, 2018, 11:56

Last Thursday, the SEC charged Musk with securities fraud for the infamous tweets about taking Tesla private at $420 per share and for claiming "funding secured" for a potential deal. He is staying on as CEO, but gives up his chairmanship.

Elon Musk has finally settled the much-hyped lawsuit against him by SEC. Musk also announced on Twitter that the automaker will start enabling some of its full self-driving features in August with Autopilot version 9, but the upgrade isn't available for everyone yet.

In reaction, Guggenheim analyst Rob Cihra, Tesla's biggest bull, reiterates a Buy rating on TSLA, with a $430 price target, which represents a potential upside of 38% from where the stock is now trading.

Two new independent directors will be appointed to the board and a new committee of independent directors will be expected to put in place additional controls and procedures to oversee Musk's communications. The SEC was seeking to prohibit Musk from serving as an officer or director of a public company. It alleged that Musk's statements - including the assertion that he had "funding secured" to take Tesla private - "were premised on a long series of baseless assumptions and were contrary to facts that Musk knew".

Shares of the company recently were up 16 percent at $307.11.

"The resolution is meant to prevent further market disruption and harm to Tesla's shareholders", Peikin added.

Mr Musk, whose tweets on August 7 on a plan to take Tesla private that was later abandoned, has tweeted only once since the settlement was announced - posting a music video by rap group Naughty by Nature.

Musk has gained legions of fans for his bold approach to business and technology, using his Twitter account to promote Tesla, his rocket company SpaceX and the tunnel venture Boring Co. But Musk has pledged to post profits in future quarters.

Neither Musk nor Tesla admitted or denied the SEC's findings as part of the settlement, which still must be approved by a court.