On Friday the stock took its biggest loss in nearly five years after regulators moved late Thursday to oust Chairman and CEO Elon Musk, saying his infamous tweet about taking Tesla private last month was securities fraud.
Tesla shares dropped 13 percent to $267.38, and have tumbled 29 percent since Musk's August 7 tweet saying he had financing arranged to take the company private at $420 a share. Ousting Musk, who has a huge celebrity status with more than 22 million Twitter followers, would be hard and could damage the company. The company's board reportedly held a telephone meeting the next night in which it urged Musk to contact investors about their interest in staying with Tesla as a private company and report back with his findings.
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".
What is Tesla without Elon Musk?
Russian Federation to "cool hotheads" by putting S-300s in Syria - English
He told Assad that Russian Federation will upgrade the Syrian air defenses and deliver an S-300 missile system to the Syrian army. Those moves prompted Netanyahu on Monday to warn Putin against "transferring advanced weapons systems into irresponsible hands".
Musk's troubles with the SEC stem from an August 7 tweet in which he said he was considering taking Tesla private for $420 per share - a corporate buyout the SEC says he had no way of financing.
"This unjustified action by the SEC leaves me deeply saddened and disappointed", Musk said in a statement provided to The Drive.
"The SEC civil action may lead to Musk's exit from Tesla (either permanently or temporarily) and the Musk premium in the shares dissipating", Barclays analyst Brian Johnson said. That's potentially crucial progress for a company that has been vague about when it'll be capable of building that many complete Model 3s, the first electric vehicle it's tried to mass-manufacture. Only the shareholders' assent was needed, he said. More seriously for Musk, and Tesla, they can ban a director from serving as an officer in a public company - a measure they are pursuing against Musk.
'The conduct is so obvious, if the SEC hadn't responded, it would make you wonder, what's the point of the SEC?'
Facebook Announces $399 Oculus Quest VR Headset
Oculus Quest is a standalone VR headset , meaning that it doesn't require a PC or a mobile phone to run VR games and experiences. The Quest looks slightly different than the Santa Cruz, coming with a more curved design than either the Go or Rift .
In its lawsuit, the SEC said Musk "calculated the $420 price per share based on a 20 percent premium over that day's closing share price because he thought 20 percent was a "standard premium" in going-private transactions". This may give the board the backbone to put Musk in a visionary role. One prominent Silicon Valley investor, who spoke on condition of anonymity to offer his candid assessment of the company, said Tesla faced a "total vacuum" of capability and confidence if Musk was kicked out.
"Despite this, we think the company will survive", he said.
News of the charges came after trading closed but Tesla shares plunged by 14pc when the markets opened Friday, dipping below $270 and wiping $6.2bn (£4.75bn) from the market value.
The Department of Justice is now investigating whether to file criminal charges as well.
Laver Cup: Dimitrov, Edmund win to give Europe 2-0 lead
Kyrgios went down in the game and lost in straight sets against Federer, who was a superior player throughout. Under the format being used for the tournament, a 10-point tiebreak is used instead of a decisive third set.
Investors are already shuddering over what a Musk-less future might bode for Tesla.
- Mourinho to Pogba: You are the anti-captain
- "UN Wasn't Laughing At Me, They Were Laughing With Me", Says Trump
- Osaka continues run towards homecoming Tokyo title
- Lacazette, Aubameyang help Arsenal edge past Everton
- The most memorable moments from Christine Blasey Ford's testimony
- Brett Kavanaugh accuser Christine Ford testifies before Senate hearing
- Jimmy Butler is already changing his mind about trade destinations
- Ripple Soars, Overtakes Ethereum As 2nd Largest Crytpocurrency
- Passenger plane lands in ocean after overshooting runway
- Tom Thibodeau pitches Jimmy Butler on rejoining Timberwolves