Elon Musk to Buy $20 Million of Tesla Stock

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Elon Musk

Tesla, Inc. (NASDAQ: TSLA)

 

Tesla chief executive Elon Musk has agreed to buy $20 million of the company’s stock, according to an 8-K filing with the U.S. Securities and Exchange Commission (SEC) on Wednesday. In May and June, the CEO also bought Tesla shares using his own cash.

The latest move, however, seems like a ploy by Mr. Musk to refund the electric-car maker the $20 million fine it’s required to pay the SEC as settlement for a lawsuit filed by the regulator filing his misleading “taking Tesla private” tweet in August.

Nevertheless, the filing clearly states that the stock purchase is “separate and apart from the settlement,” which was signed off by a federal judge on Tuesday. The document says, “Tesla expects that it will issue and sell to Elon, $20 million of Tesla’s common stock during the next open trading window at the then-current market price.”

On August 7, the 47-year-old Silicon Valley magnate tweeted that he had secured money needed to take the company private at $420 a share. SEC officials later sued him and Tesla after they established that he was just taking investors for a ride.

Tesla and Elon Musk reached a settlement with the securities agency a few weeks ago that received approval of US district judge Alison Nathan. The agreement requires him to pay a fine of $20 million without denying or admitting wrongdoing.

Elon Musk will also relinquish his position as chairman of Tesla for a period of at least three years. In addition, the company will pay a fine of a similar amount and must hire two new independent directors to its board within 90 days after filing of the settlement.

Shares in Tesla ended the regular session on Wednesday with a loss of $4.81, or $1.74% to $271.78. The stock, which has gone down more than 12% year to date, sank $2.33 to $269.40 before the opening bell on Thursday.

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. Tesla, Inc. was founded in 2003 and is headquartered in Palo Alto, California – Yahoo Finance

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