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Bloomberg
Tesla Inc. jumped in pre-market trading after founder Elon Musk settled a lawsuit brought by regulators over his August tweet storm, reassuring investors he’ll still be calling the shots at the electric-car maker struggling to meet production goals.
Under the agreement with the US Securities and Exchange Commission, Musk and the company each will pay a $20 million penalty, and Musk will be removed as chairman for at least three years. In suing Musk, the agency had sought to oust him as both chairman and CEO. Tesla jumped 16 percent to $306.50 in New York, clawing back Friday’s 14 percent plunge. The shares closed at $307.52 before the SEC announced its enforcement action over the tweets, in which Musk said he had “funding secured†to take the company private at $420 a share. He later dropped the plan of pursuing
a buyout.
Now investors want to see if Tesla met its production goals by the end of the third quarter on Sunday at midnight. An initial verdict of feat or failure could land as soon as Monday, in the form of Tesla’s latest production and deliveries release.
Even after the stock’s slide from last year’s peak, Tesla is valued at $45.2 billion in the stock market. Shareholders are betting the company is on the cusp of turning a profit thanks to its lower-priced Model 3 sedan. Short sellers, meanwhile, have targeted the company, saying it needs to raise billions of dollars more in financing, has woeful quality control and is run by an erratic, unfocused CEO.
An army of Tesla-owning volunteers swooped in over the weekend to help deliver cars to new buyers while Musk cheered on his employees, telling them in emails to “ignore all distractions†and that they were on the cusp of “an epic victory beyond all expectations.†In the Chicago suburb of Highland Park, more than 75 people crammed into Tesla’s service centre and another 50 or so waited outside.
In the Los Angeles community of Marina del Rey, a steady stream of customers arrived while tractor trailers pulled in to unload vehicles that had been stored in Burbank. In Coral Gables, Florida, a showroom attendant who asked not to be named said deliveries were scheduled hour-by-hour to avoid congestion.