Tesla Shares Rebound After Elon Musk’s SEC Settlement

1465
tesla

Tesla Inc (NASDAQ: TSLA)

 

Shares of Tesla Inc. gained 15.5 percent to change hands at $305.88 in premarket trading on Monday after the electric-car maker and chief executive officer Elon Musk reached a settlement with the U.S. Securities and Exchange Commission over the weekend.

tesla

Under the terms of the agreement, Tesla and Musk will neither admit or deny wrongdoing alleged by the SEC. However, Musk will pay a civil fine of $20 million and forfeit his position as chairman of Tesla for at least three years. The company has also been slapped with a $20 million penalty and asked to appoint two independent directors to its board.

On Friday, shares of the company dropped as much as 14 percent after the Silicon Valley billionaire of securities fraud. The regulator accused Musk of issuing “false and misleading” information when tweeted on August 7 that he considered taking the company private for $420 a share, claiming that he had “funding secured.”

The lawsuit had investors worried that Tesla would lose the services of Mr. Musk, who has been a key figure in the company. Some investors had also raised concerns that a prolonged lawsuit would have undermined the operations of the firm, cripple its ability to raise capital and derail the production of Model 3 sedans.

While shareholders of the company welcomed the stock’s massive gains on Monday, some short sellers were left counting losses after failing to cover their positions.

Tesla Inc Company Profile

Tesla, Inc. designs, develops, manufactures, and sells electric vehicles, and energy generation and storage systems in the United States, China, Norway, and internationally. The company operates in two segments, Automotive, and Energy Generation and Storage.

The Automotive segment offers sedans and sport utility vehicles. It also provides electric vehicle powertrain components and systems to other manufacturers; and services for electric vehicles through its company-owned service centers, Service Plus locations, and Tesla mobile technicians. This segment sells its products through a network of company-owned stores and galleries.

The Energy Generation and Storage segment offers energy storage products, such as rechargeable lithium-ion battery systems for use in homes, commercial facilities, and utility grids; designs, manufactures, installs, maintains, leases, and sells solar energy systems to residential and commercial customers; and sell renewable energy to residential and commercial customers.

The company was formerly known as Tesla Motors, Inc. and changed its name to Tesla, Inc. in February 2017. Tesla, Inc. was founded in 2003 and is headquartered in Palo Alto, California. – Yahoo Finance

NO COMMENTS