One Tweet Demotes Musk 🔥
In August, Elon Musk tweeted that he was considering taking Tesla private, causing the stock to jump by 11%. Later, it was discovered that Musk was likely targeting short-sellers (people who bet a stock will decrease in value) with his tweet. The SEC filed a lawsuit against Musk for misleading investors. The suit was settled over the weekend, with Musk agreeing to step down as Chairman of Tesla. Tesla and Musk will also have to pay $20 million each to “harmed investors.”
Pressure mounting for Elon
Tesla is a global leader in the electric car revolution. Despite the Model S being the best-selling electric car in the world in 2015-16, Tesla has been plagued by three major product recalls, controversial vehicle crashes and fires, and continuous production delays for its Model 3. Pressure has been mounting for Musk and this latest misstep cost him big time.
Those supporting Musk take one of two approaches. The first, more passive, approach is to focus on the strong Q3 results that Tesla is expected to post. The second approach is much more direct, defending Musk against the SEC and his detractors, specifically calling out former GM exec Bob Lutz who said that Musk was “headed for the graveyard,” while asserting that Musk came out ahead of the SEC in his settlement.
Those not in favor of Musk write about how he got away easy with “only” a $20 million fine and losing his seat as Chairman. Some go further by questioning if a new Chairman will be able to control Musk and if adding two new board members will be enough to bring “adult supervision” to Musk. These stories also focus on the 14% plunge Tesla stock took following the SEC announcement.
What's going on with Musk?
Musk’s "Iron Man" status has diminished rapidly this year after multiple questionable Tweets; including one on press fairness labeled as anti-semitic, another calling transit experts who disagree with his autonomous car model “idiots,” and multiple where he asserts that one of the divers involved in the Thai cave rescue is a pedophile. It might be best if Musk takes a break from social media to focus on the businesses that made him famous.
"I thought I had the funding secured at $420/share..."
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