The CNN article I read said that Musk refused an earlier (before the SEC filed suit) offer from the SEC of a nominal fine and stepping down as chair for 2 years. Crazy, if true. Either he got some REALLY bad legal advice or the the guy acted on his gut (again). Crazy visionaries will be crazy visionaries, I guess.
Though I suspect the stock will rebound, now that the risk of his ouster as CEO is gone. Heck, it may even go high than just before the suit, because the market was anticipating some sort of consequence to his tweets.
So was the SEC, hence the fine.
Yeah, Steps, that is the part the SEC doesn’t like. I think their price may stabilize because a crazy person won’t be running the day to day. However…the fundamentals haven’t changed.
Time to Put Down the Bong, Elon
Tesla’s CEO needs to steer the car maker toward a future that doesn’t depend on green politics.
The bigger question concerns the future of Tesla. I’ve made clear what I think about Mr. Musk’s green BS, the difficulties attending his business model, his reliance on public subsidies, and the unspoken expectation that a draconian regulatory crackdown on fossil fuels will guarantee his success.
Tesla believers have nobody to blame but themselves for a Tesla stock bubble they created. But I don’t have a dog in this fight the way some of my short-seller readers do. I don’t need the company to fail to feel vindicated. I will feel equally vindicated and much happier if Mr. Musk can straighten up and generate authentic profits based on the market that clearly exists for electric cars among swells and enthusiasts.
He’s still running the day to day. Do you mean that this action will make Musk less crazy?
No, he is indeed stepping down from the executive role (no day to day or managerial role). Also his comms must be “monitored”. From the WSJ description of he deal he and Tesla made with the SEC:
Instead, on Saturday, the SEC announced that Mr. Musk had settled the lawsuit that sought to ban him from running publicly traded companies. He agreed to step down as chairman and remain ineligible to be re-elected to that position for three years. Mr. Musk will remain on the Tesla board.
Tesla has agreed to appoint two new independent board members, establish a new committee of directors and create controls to oversee Mr. Musk’s communications, according to the SEC.
Elon is still CEO, Chief design officer probably acting COO (to say the org chart is fluid at Tesla is a huge understatement). It is great he is stepping down as Chairmen, I think CEO and chairmanship should be help be separate people as matter of good corporate governance.
The new structure will put a leash on Elon, but it is not a very short one.
Well, keep in mind, when you settle with prosecutors, they aren’t dropping the charges per se. If compliance with the agreement gets called into question, you go back in front of a judge. No jury…because you pled.
So if he strains at his new leash…the Court can up his pain-o-meter…for the next three years.
But it doesn’t sound like the agreement forbids him to run the company. He’s not the Chairman of the Board any more, but that’s not an executive role anyway. He’s still the CEO, still in day-to-day charge, and the agreement permits him to be.
Agree. Did you read the article? Its a Nolo Contendere plea bargain (based on the terms), and phrasing. Yeah, he is involved, but he isn’t chairman of he Board for 3 years. And “controls” are in place so his official communications are managed. All for a 3 year term(which exists because that is the agreed term of the plea deal)…
A plea deal means the SEC and the court have that period (three years)to crawl up you tuchus regarding compliance.
Nope, it’s paywalled, and I don’t pay the WSJ. I have read other stories on the agreement. Musk still has day-to-day executive control of the company.
The imposition of court ordered controls and two independent board members who have to be court-approved is pretty stringent. They had him over a barrel. The WSJ is really well-sourced for this sort of thing. They don’t come out and say “its Nolo Contendere” but the language of the details makes that pretty clear.
Yes, I understand those things, but it doesn’t separate Musk from the day-to-day running of the company. He’s the CEO, and that agreement doesn’t change that. I have no doubt that he’ll be more circumspect about tweets.
Going offline for this discussion.
You’re misunderstanding the agreement. He is very much still in charge day-to-day. Chairman of the board is not an executive position. The SEC doesn’t want to see investors punished even more by Musk’s ouster from control of the company. They want his bad behavior reigned in, not his executive role.
Agree, I miswrote earlier.
Doesn’t seem like these “controls” on his tweeting are doing much good.
Great move when you’re under regulatory scrutiny.
Also this, attacking Blackrock for making “excessive profits” from lending shares to short sellers. It doesn’t even make sense on its own terms. He should be happy if they’re making excessive profits, because it means they’re ripping off short sellers and making it more expensive for them to short Tesla.
I think he is on a Death Ride.
Elon Musk Tweet Appears to Mock the Securities and Exchange Commission
Tweet says the ‘Shortseller Enrichment Commission is doing incredible work’
Regulatory specialists said Mr. Musk’s new tweets potentially violate one of the main principles of his “no-admit, no-deny” settlement with the SEC, which includes an agreement not to make statements that suggest the agency’s allegations are without merit.
“Before the sun sets today, the SEC and his lawyers will be on the phone,” said Stephen Crimmins, a former SEC litigator now at Murphy & McGonigle PC. “It definitely jeopardizes the settlement.”
For the settlement to move forward, the SEC could demand additional constraints on Mr. Musk’s activities, Mr. Crimmins added, since the primary concern of the SEC’s case was about how he had acted as a CEO and how he would behave going forward.
https://www.wsj.com/articles/elon-musk-tweet-appears-to-mock-the-securities-and-exchange-commission-1538685320?mod=hp_lead_pos2
I tried to short Tesla a week ago and they had run out of short positions.
This one I don’t think we can really blame on Trump, since it’s been happening for years any time a big corporation gets its hooks into politicians. But having Trump in charge of the executive branch certainly has accelerated the process.
Wow. Robert Reich!!! He sure isn’t an unbiased observer…:) He’s not grinding a particular axe…
