Elon Musk in the News – CEO of Tesla may lose his job – Read how.
SAN FRANCISCO: Elon Musk – CEO of Tesla may lose his job as his tweet left Tesla’s market worth to descend by $14 billion in hours. Tesla’s Board along with the US Securities and Exchange Commission (SEC) must have considered this act while making a decision as the shares of Tesla lowered as much as 12% Friday before concluding down 10.3% post Musk’s tweet.
What did Elon Musk say?
Elon Musk had reported strong quarterly figures which raised the shares higher. Prior to Musk’s tweet, Tesla stock was trading at 760.23 and then lowered to a session low of 717.64, before reducing even more. On Friday, Musk sparked the controversy by tweeting “Tesla stock price is too high imo (in my opinion)”. This tweet which stated that Tesla stock was “too high” even knocked $3 billion off his personal stake in the company.
Elon Musk’s track record
In August 2018, Musk had notoriously posted about Tesla “going private, funding secured” at $420 a share cost him his position as Chairman. The tweet resulted in musk and Tesla reaching a resolution of fraud charges with the SEC. This settlement covered $40 million in penalties, divided equally between the company and Musk, and the withdrawal of Musk as a chairman of the Tesla Board. Steven Peikin, Co-Director of the SEC’s Enforcement Division had stated, “As a result of the settlement, Elon Musk will no longer be Chairman of Tesla, Tesla’s board will adopt important reforms — including an obligation to oversee Musk’s communications with investors — and both will pay financial penalties.”
In accordance with the SEC’s complaint, Musk’s misleading tweets resulted in Tesla’s stock price to drop by more than 6% on August 7, which caused significant market disruption. From Tesla’s market price being around $141 billion before the first tweet, it plunged to $127 billion.
Musk is supposed to request for pre-approval if his tweets contain anything regarding the company’s securities, inclusive of his private legal or regulatory outcomes or decisions or even his disposition or acquisition of shares.