Elon Musk relinquishes chairmanship of Tesla

On Aug. 7, 2021 in a cryptic tweet, Elon Musk entrepreneur hinted that the possibility of exiting the American Stock Exchange was on the table as there were funds of billions that covered a premium for $420.00 per share, an amount far higher than the actual value at the time of the events. 

Elon Musk’s tweet did not go unnoticed

The tweet had certainly not gone unnoticed, and while some thought it was a joke or at least one of those jokes that Musk has accustomed us to, others had taken it seriously and were waiting for the shareholder vote that would decide Tesla‘s fate. 

For its part, Wall Street took it badly and the SEC filed a fraud lawsuit against the American entrepreneur concerning the controversial tweet believing what Musk said in the post to be impossible. 

The lawsuit went forward and after an initial rejection of a plea bargain that included suspending the CEO of Tesla from the presidency for a period of two years and paying a $20 million US fine (10 to the individual and 10 to the company) a new agreement was reached. 

The epilogue is worse than the previous proposed settlement and includes a suspension for a full three years from the presidency (to which the CEO will be eligible to run again at the end of this time frame), the payment of $40 million of which $20 million will be paid by Musk and the same amount by Tesla, the appointment of two independent executives, a new chairman, and an internal committee to watch over the tweets with strict guidelines. 

Stephanie Avkian, SEC Co-Director of Enforcement, said. 

“The various measures were designed to […] strengthen Tesla’s governance and oversight in order to protect investors”.

Elon Musk backed into a corner

Musk also appears to have long been on the outs with some shareholders who accuse him of plagiarizing the rest of the board.

The shareholders refer in particular to Brad Buss, Musk’s brother and former solar panel manufacturer, or Steve Jurvetson, a shareholder in Solar City (a company purchased by Tesla) and an investor in SpaceX (the histrionic entrepreneur’s space company). 

The agreement, finally reached after convulsive bargaining, compacted the company’s human resources who were galvanized by their mentor with congratulations via email for achieving remarkable business results. 

Against all expectations and in anticipation of a tearful quarterly, a very good result came from the sales branch, the Model 3 in fact reached 10,000 units per week, double the stated targets. 

In the meantime, while waiting for the quarterly holdings, Tesla (TSLA) reaches a capitalization of 700 billion US dollars and gains a timid +1.30% in the stock market, which in a bear market is a good sign. 

Meanwhile in Germany, the Bild leaks news that the Berlin Gigafactory will close its doors for a week in order to reorganize the production line and add a shift so as to make up for production shortfalls due to the Lockdowns that forced Tesla to close in Shanghai. 

The goal for Tesla is to produce 500,000 cars a year at the Berlin plant alone so as to make up for any shortfalls at other plants around the world due to various Lockdowns.