Advertisement

Tesla stock leaps after Elon Musk settles with SEC and remains chief executive

Tesla stock leaps after Elon Musk settles with SEC and remains chief executive
Tesla CEO Elon Musk agreed to relinquish his role as chairman of the automaker for three years. (Patrick T. Fallon / Bloomberg)

Tesla Inc. stock jumped more than 16% Monday morning, the first day of trading since the electric-car maker’s Chief Executive Elon Musk agreed to settle a Securities and Exchange Commission lawsuit that charged him with fraud and sought to push him out of the company’s leadership.

Shares of Tesla were up 16.7% at $308.89 in the first minutes of trading Monday. That was still down nearly 10% compared to Aug. 6, the day before Musk issued the slew of tweets that began the saga.

Advertisement

On Saturday, Musk and Tesla agreed to pay $40 million — $20 million each — as part of the settlement. Musk agreed to relinquish his role as chairman of the Palo Alto automaker for three years, and the company is required to install an independent chairman and two new board members. Musk will remain on the board. He and Tesla did not admit wrongdoing.

Musk revived his rakish Twitter persona early Monday. At about 1:30 a.m., he tweeted, “Naughty by Nature” with a winking emoji and a link to a music video of the same name by rap group O.P.P.

Saturday’s settlement marked a swift end to the SEC’s lawsuit, which was filed Thursday. In it, the regulatory body alleged that Musk made “false and misleading” statements in August tweets about his plans to take Tesla private at $420 a share. It alleged that Musk’s statements — including the assertion that he had “funding secured” to take Tesla private — “were premised on a long series of baseless assumptions and were contrary to facts that Musk knew.”

As part of the lawsuit, the SEC sought to have Musk banned from serving as an officer or director of any public company.

The suit was filed after markets closed Thursday. On Friday, Tesla’s stock sank almost 14%.

9:35 a.m.: This article was updated with a tweet from Tesla Chief Executive Elon Musk.

This article was originally published at 6:55 a.m.

Advertisement
Advertisement