SEC Seeks to Ban Musk From Running Public Company

30 September, 2018, 01:31 | Author: Salvatore Jensen
  • Elon Musk smoking weed on

The stock could fall further, whether or not the Securities and Exchange Commission succeeds in forcing him out as chairman and CEO.

There were signs of progress in the months after that, and investors cheered in June after Musk said Tesla was about to hit its goal of making 5,000 Model 3s a week.

In the end, Musk decided it was best for Tesla to stay public and focus on executing its plans for the Model 3 and other electric vehicles. They still value the company at around $45 billion, about $2 billion less than General Motors and significantly more than rivals like Ford and Fiat Chrysler.

"Tesla is going to blow the sales numbers out of the water, but Elon's stress and meltdowns over these past months have had a real impact on the company", he said.

Musk, 47, is the public face of Tesla and losing him would be a big blow for the money-losing auto maker which has a market value of more than $50 billion, chiefly because of investors' belief in Musk's leadership.

Tesla, whose shares are off 16% this year, still is outperforming Ford (down 25%) and GM (off 18%). Before the news Thursday, the price was at $307. It fetches under seven times projected 2018 earnings of $1.35 a share and yields 6.6%. The agency is also seeking civil penalties.

Musk tweeted the information to his 22 million followers without discussing it with Nasdaq, the index on which Tesla stock is traded.

The SEC sued Tesla CEO Elon Musk on Thursday, saying he made "false and misleading" statements in August about possibly taking Tesla private.

Barclays has warned that if Musk is forced to leave, it will send Tesla shares down another $130 - or 48 per cent from their current level.

That's a 44 per cent decline from where the shares ended just hours after Musk tweeted over the summer that he had secured funding for a buyout.

Early trading Friday has shares down about 12%, as Wall Street analysts begin to digest the possible repressions of such a lawsuit and disseminate that research to their clients. Analysts at Citigroup view both scenarios as weighing on Tesla shares.

Musk pulled out of a settlement with the SEC in which he and Tesla would have had to pay a nominal fine, CNBC reported, citing sources it didn't identify. He has a $US195 price target for the stock.

"Uncertainty around the future leadership at Tesla may impact its ability to raise additional capital", Spak wrote.

Hey you! We want to know what you think about The Outline (and you can win some cool swag too). Tesla has been profitable in only two quarters in the past decade.



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