Tesla shares jump after Elon Musk settles with SEC

Elon Musk to Resign as Chair of Tesla Board but Remain CEO

Billionaire businessman Elon Musk has stepped down as the Chairman of Tesla following a tweet where he claimed he has the funding and investor support to buy the publicly-traded company.

Nelson, who called the $20 million fine as "pocket change", noted that as part of the settlement, the company will have a "healthier level" of corporate governance as it separates the chairman and CEO roles, and requires the appointment of two new outside members to the board.

Tesla's shares soared 16% on Monday after chief executive Elon Musk settled a fraud lawsuit with the U.S. regulator. Despite Friday's plunge, though, Musk seemed to be in light spirits on Friday, expressing his gratitude to the Tesla community and even posting a "Don't Panic" message on Twitter.

Tesla, which has repeatedly fallen short of its own manufacturing targets, probably will finish the quarter making 53 457 Model 3s, according to the Bloomberg Tracker, an experimental tool to monitor the rollout by using vehicle identification numbers to estimate production in real time. But it quickly became clear that Musk's funding commitment-supposedly from Saudi Arabia's sovereign wealth fund-was informal at best. The SEC's complaint alleged that Musk had made "false and misleading" statements, with Tesla's share price having risen on the back of Musk's tweet.


As part of the settlement, Tesla will appoint an independent chairman, two independent directors, and a board committee to set controls over Mr Musk's communications under the proposed agreement.

After filing the lawsuit, SEC officials were anticipating a drawn-out legal battle, but settlement talks started up again late Friday after Musk's attorney Steven Farina sent an email asking to reopen the discussions. The tweets had no basis in fact, and the ensuring market chaos hurt investors, the SEC said. Tesla will also need to bring a couple more independent directors on board.

The Model 3 is seen by analysts as crucial to the carmaker's long-term prospects and Musk has promised the ramp-up will help make the company profitable in the third quarter. "We are very close to achieving profitability and proving the naysayers wrong, but to be certain, we must execute really well tomorrow (Sunday)".

Tesla jumped as much as 19% to $315.45 at 7:45 am NY time, more than enough to offset Friday's 14% plunge.

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