Daily Trends Now
Daily Trends Now


Three takeaways for investors after the Tesla suit

Three takeaways for investors after the Tesla suit

27, of fraud and sought to remove him from his role in charge of the electric vehicle company, saying he made a series of "false and misleading" tweets about potentially taking Tesla private last month.

Tesla Inc's (TSLA.O) Elon Musk could settle with US regulators who have sued to remove him from the electric carmaker's leadership, but he is prepared to fight the securities fraud lawsuit against him in court, sources said on Friday as shares plunged about 14 percent. It alleges investors were misled by Musk's claims that he'd worked out funding to take Tesla private at a premium of $420 a share, a number that Musk later conceded was meant to be a humorous marijuana reference, according to the SEC suit.

Gorman added that even if the SEC lawsuit moves forward without any interruption from Justice, it is hard to see the regulator separating Musk from his company without doing damage to the electric-car maker.

The SEC further states that "Musk's false and misleading public statements and omissions caused significant confusion and disruption in the market for Tesla's stock and resulting harm to investors".

The no-compromise stance suggests that the legal case over Musk's considered-but-discarded plan to take Tesla private won't be resolved quickly.

The SEC took issue with a number of Musk's tweets on August 7, primarily dealing with the certainty with which he asserted Tesla could be taken private.

The billionaire entrepreneur said he had done nothing wrong and the company's board said it supported him.




Musk said in a statement that the SEC's "unjustified action" left him "deeply saddened and disappointed". He said: "I have always taken action in the best interests of truth, transparency and investors".

Tesla shares have been volatile for years, but even by its standards, August and September have been dramatic. If Tesla fails to meet production targets in the second half of 2018, it will need a different source of cash to pay for the $1.3 billion in debt it has coming due by March 2019. The two sides reportedly came close to a settlement before Musk backed out and the SEC filed a complaint seeking to ban him from serving as a director or officer. The Justice Department has also opened a fraud investigation.

It's surely the most expensive tweet ever, as Tesla has lost $19.6 billion in value in that drop, a total that is just short of the value of Twitter as a company.

The things people do to make their girlfriend laugh. The commission chose to go ahead with it after Mr. Musk refused to negotiate a settlement, according to a person familiar with his thinking.

Tesla's shareholders have to assess what will happen to the company if Mr. Musk is not the CEO.

Johnson says the suit only confirms what he's been saying for a while now, and that it will force investors to actually focus on the company's fundamentals.

Hanging in the balance is Tesla, the $45 billion emblem of America's future in battery-powered cars.

follow

editors' picks

September 28, 2018
Red-hot Arsenal rolls over Everton
Everton had created most of the early chances as they looked for their first victory at Arsenal since January 1996. I take Tiger Woods - ten years since he won a major and the longer it (the wait) goes, the harder it becomes.

September 26, 2018
Walmart warns Trump tariffs may force price hikes
China responded with tariffs on $60 billion worth of American products, including clothing, furniture and auto parts. The turnaround is remarkable, given how sour corporate America had grown on China by the time Trump was inaugurated.

September 25, 2018
Sacked ABC boss Michelle Guthrie considers legal options
She said there is no justification for the Board to trigger the termination cause and she is considering her legal options. She was smart and we were excited.

September 25, 2018
Brett Kavanaugh Accused of Sexual Misconduct By a Second Woman - Hit & Run
Ford and deprive her of the ability to make a considered decision that has life-altering implications for her and her family". The Washington Post reported late Saturday that it had talked to Keyser, who told the paper she believed Ford's allegation.

September 24, 2018
Kavanaugh accuser to testify before Senate on Thursday
Republican committee staff and Ford's lawyers had reached a stalemate in negotiations over the details of the testimony. Christine Blasey Ford to testify about her sexual assault allegations against Supreme Court nominee Brett Kavanaugh .

September 21, 2018
South Korea's Moon Jae-in attends Pyongyang Mass Games
It also was unclear what " corresponding steps" North Korea wants from the United States to dismantle its nuclear site. The North Korea ball is thoroughly back in Washington's court.

September 20, 2018
Paul Pogba says Manchester United are mentally stronger after three wins
A Champions League match 60 years in the waiting. A good start for him in the red shirt. Nine minutes later, Pogba had two.

September 19, 2018
China strikes US$60B of U.S. goods in widening trade war
Beyond that, Trump has threatened tariffs on all automotive imports, which would be another $350 billion worth of goods. The tariffs are meant to punish China for alleged unfair trade practices, including intellectual property theft.

September 18, 2018
Incredible Scenes As Buffalo Bills Player Quits And Retires At Half
I'm not sure what's going on in his mind right now. "I wish I had a better answer". That's what a team does, this is not going to become a distraction moving forward.

September 15, 2018
Gas explosions drive thousands out of homes in Boston suburbs
One person was killed Thursday as dozens of house fires burned in MA after reports of issues with the natural gas system. That directed 20 fire engines and 10 fire ladder trucks to the Town of Andover plus the town's entire fire department.