Elon Musk To Step Down As Chairman But Remain CEO

Marcus Newton
October 3, 2018

Just last week, Musk cleared a dark cloud hanging over the company when he agreed to settle a Securities and Exchange Commission case alleging he had misled investors by declaring he had lined up the financing to take Tesla private.

His words rang true as following the news of Musk's settlement with SEC, Tesla's stocks improved by 16% in pre-market trading. The SEC cited "significant market disruption" as the primary repercussion of Musk's loose lips, as well as questioning Tesla's dissemination of information.

Elon Musk will continue as the CEO of the company.

Besides a new chairman, Tesla was also ordered to appoint two new, independent members to its board.

Musk said in a tweet in May that the company would need to sustain production of 5,000 Model 3s per week to make a profit on the critical auto and to survive. He went on to claim that the funding is already in a secure state but seeks a shareholder vote.

Tesla's production ramp for the Model 3 has not been easy for the company. It was one of Elon's first tweets since settling with the regulatory agency.

Both sides agreed to a settlement over the weekend, which requires Musk to step down as the firm's chairman for at least three years, although he will be allowed to stay on as CEO.

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Two days later, Elon Musk and SEC reached a settlement that will leave a 20 million dent on the Billionaire's pockets.

"The stock was down so much on Friday because it was unclear if he would remain with the company at all given what the SEC was pushing for", said Garrett Nelson from CFRA Research. Musk has told upset customers that "we've gone from production hell to delivery logistics hell", and the CEO has incomprehensibly suggested the solution is for Tesla to build its own auto carriers, despite no evidence of any shortage of vehicle haulage capacity.

Tesla must also hire an independent chairman to oversee the company.

The total included 53,000 Model 3 sedans - hitting the middle of its earlier promise to deliver between 50,000 and 55,000, the site reported Monday.

They also hoped the row would cap several months of volatility around Tesla's shares driven in part by a series of rows over Musk's tweets and public pronouncements.

The settlement marked a swift end to the SEC's lawsuit, which was filed Thursday.

Other reports by MaliBehiribAe

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