Elon Musk to Step Down as Tesla’s Chairman and Pay US$20 Million Fine…All Because of a Tweet
If you haven’t been following the news of Tesla’s “tweeter-happy” founder/CEO/Chairman of Tesla Motors, Elon Musk landed himself in hot water when he posted on his Twitter account last month that he had secured funding to take the company private.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
The famous (or is that infamous) entrepreneur, who started making his name and money from previous successful businesses, such as PayPal, appears to not have learned much about managing a business that requires delivery of a consumer product produced at scale within a stipulated deadline, much less to manage a public company. You can’t just make an announcement like that and then…take it back.
As we reported earlier, the Securities and Exchange Commission (SEC) (as well as the Department of Justice) launched an investigation into Musk’s misleading announcement.
Read about it and Musk’s other misbehaviours: Tesla Needs to Put Elon Musk Back in the Baby Chair.
On Thursday, the SEC and Musk’s lawyers reached a settlement that, according to The New York Times, required Musk to resign as Tesla’s Chairman and not return to the position in the next two years; Musk and Tesla were also required to pay US$10 million in fines, and Tesla had to appoint two new directors to the Board.
It sounds like a pretty good deal, and with the terms not requiring Musk to admit to or deny any wrongdoing. But the deal fell apart that same morning when Musk turned it down. Just like that.
So, the SEC reacted…by suing Musk; the SEC sought to have Musk barred from serving as executive or director of any public company.
A new deal was then struck and this time, a significantly less sweet one, and the matter appears to have been settled. Musk will resign as Chairman within 45 days and won’t be allowed to return to the position for three years, and Musk and the company will each have to pay a fine of US$20 million. A watchdog in the form of a lawyer will also be hired by Tesla to keep an eye on Musk’s communications.
But even after all these, Tesla’s Board still has Musk’s back. After all, he could be the only reason the company is still around, despite being fraught with delays and a mountain of debt. Musk and Tesla are synonymous in the public eye, that one wonders if the company can survive without the man.
After what must have been an ordeal for him on Saturday, when it seemed like he could have lost the company that he built, he tweeted this:
And remember … pic.twitter.com/UaDUv4OlZf
— Elon Musk (@elonmusk) September 28, 2018
That’s his own Tesla Roadster that was launched into space by SpaceX back in February.
Don’t fly too close to the Sun, Mr Musk. You know what happens…