By on October 16, 2018

Elon Musk + Tesla Model S Circa 2011

Tesla CEO Elon Musk will soon be gone as company’s chairman, but a replacement — someone who’ll need to occupy the position for three years — has yet to be named.

The hourglass was flipped after U.S. District Judge Alison Nathan approved a settlement between Musk and his company and the U.S. Securities and Exchange Commission Tuesday. Musk has 45 days to step down as chairman. Double the amount of time is allowed for the automaker to name two independent board members, though Musk and Co. only have two weeks to pony up their $20 million fines.

The settlement, which stayed on track despite Musk’s attempt to screw the whole thing up, contains a punishment perhaps far greater than those listed already: Musk now requires a Twitter parent.

Yes, the social media portal that got him in deep trouble with the SEC and sparked a stock price plunge is being reined in, at least on Musk’s end. A company lawyer will have to oversee all Musk communications, including tweets. If it looks like a message sent into the social media ether might exert some sort of force on Tesla’s stock, that lawyer has the ability to say, “No, go to bed.”

While it was his declaration of “funding secured” (for his August go-private bid) that landed Musk in the crosshairs of the securities regulator, numerous other non-financial tweets have all served to depress the company’s share value. This issue became more, ahem, pronounced over the past few months. Regardless, word of the settlement’s approval clearly pleased investors and analysts; as of publication time, the stock’s up 6.2 percent in Tuesday trading.

As we’ve gone over the downright odd chain of events that precipitated this settlement before, there’s no need to cover every inch of past ground. Essentially, the 11th hour settlement kept Musk at the helm of Tesla and made an SEC fraud lawsuit disappear, but shortened the chief executive’s leash.

Between the August 7th (fateful tweet day) and now, Tesla’s market value shrunk from $65 billion to $46 billion.

[Source: Reuters, MarketWatch]

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12 Comments on “With Settlement Approved, Elon Musk Has 45 Days to Vacate the Chairman’s Seat...”

  • avatar

    Probably a good thing for Musk ,although it’s doubtful he see’s it that way. The best way for Elon to stick it in their ear Is to stop all the blabbing and get to work solving problems. The haters and the short sellers are not going to go away untill then.

  • avatar
    SCE to AUX

    If you want a smooth ride, buy a Tesla.

    If you want a smooth ride, don’t buy TSLA – buy bonds.

  • avatar

    Tesla’s ‘new’ autopilot system isn’t actually for the cars, it’s for the chairman’s desk. Tesla itself will be run by autopilot.

  • avatar
    FWD Donuts

    Mulally as Chairman immediately comes to mind. Automotive and big time manufacturing experience. Doubt he’d be interested in a three year gig, though. Don’t think Musk would be interested in that, either, as he wouldn’t want someone to try and convert Tesla into just another automotive company. Besides, Tesla likes to think of itself as an energy company with battery technology, solar technology, etc. — with automobiles being the most visible aspect of it.

    Some of the fanboy crazies have been talking about Al Gore — playing up his environmental “credentials.” Don’t know about that. He’d just be a goofy figurehead who would fly in, collect his check, and eat anything within arm’s reach on the conference room table.

    Foxconn’s Terry Gou would be interesting — but probably too busy. Expect to see someone from Silicon Valley to take the seat. I could see one of the VCs currently on his board. Someone with good technological skills and envirotech background. Somebody from Apple as well.

    No matter who takes the seat — we’ll be talking about it.

    • 0 avatar
      SCE to AUX

      Despite my interest in Tesla’s products, I no fan of Mr Musk’s environmental bleatings. If Al Gore came in, I would *never* buy a Tesla as long as he was there.

    • 0 avatar

      Probably one of the last people I would hire, if I were Tesla. The company needs a non-traditional Chariman, not somebody used to how everybody else does things. When working in an industry full of conventional thinking, you have to think unconventionally to get ahead.

      It’s too bad Sergio had to succumb to Cancer… he would have been an ideal candidate.

    • 0 avatar

      New CEO? Steve Ballmer — he’s tanned, he’s rested. Who else has more experience nickel-and-diming the faithful with phony upgrades and endless revisions? A match made in heaven.

  • avatar

    So, instead of sitting on the throne, Musk will be the power behind the throne. Not having the legal responsibilities of CEO will free him to make still more outrageous public statements.

    • 0 avatar

      He’s still CEO, so he’s still bound by laws or regulations and, as mentioned, now he has to have his tweets approved. This last bit is more punishing than the $20 million fine, imo. Now, he can’t unleash his burgeoning insanity.

  • avatar

    45 days should be just long enough for him to make the relevant announcement via the quarterly report as to whether or not Tesla managed to show real profit for the first time in several years… profit that, instead of just one quarter of positive cash flow, could herald an extended period of profits leading to Tesla finally proving itself as a car company.

  • avatar

    He will still be too close to Tesla. Hes a cancer.

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