Tesla shares jump after Musk settles with SEC

Ann Santiago
October 2, 2018

Tesla made its biggest gain in five years after Musk reached a settlement with securities regulators that will allow him to stay on as CEO of the electric vehicle maker.

The news of Tesla CEO Elon Musk settling with US financial regulators sent the company's stock soaring Monday morning.

The case focused on Musk's claims in August that funding had been secured for a plan to buy out Tesla's publicly traded shares at a price of $420 and take the company private.

They also hoped the settlement would cap several months of volatility around Tesla's shares driven by a series of tweets and public pronouncements by Mr Musk.

Musk, 47, told employees in an email on Sunday that the company was "very close to achieving profitability and proving the naysayers wrong", but still needed to execute on the last day of the quarter.

Tesla is slated to report third-quarter production and delivery figures early this week.

Besides the settlement news, Tesla has another milestone this week. The brainchild of Tesla has a few times been associated with more than one actions that have landed him in trouble with his investors and even the media. The open board chairperson role creates an opportunity for Tesla to potentially put someone in place that is capable of influencing Musk and helping Tesla reach sustainability.

Musk and Tesla will also have to pay a $20million fine, though he is allowed to continue as CEO.

Musk has agreed to pay out the $20 million fine.

Back in 2016, Tesla announced that all its cars will come with self-driving hardware, which owners can switch on if they decide to activate level 5 autonomy.

Musk's settlement with the SEC requires him to give up his position as chairman of Tesla's board for three years. The SEC also filed papers that charged Tesla with failing to exercise proper oversight over Musk's actions and laid out a separate settlement of those charges.

As developments over the weekend would prove, Elon Musk's "Don't Panic" message seems to be well-founded.

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