Elon Musk has agreed to step down as Tesla chairman for three years

[mongeese]

The big picture: Only a couple of weeks ago, it was revealed that Elon Musk was under investigation from the Department of Justice over his tweets on August 7th that stated he was “considering taking Tesla private at $420.” Two days ago, the Securities and Exchange Commission brought a lawsuit against Musk alleging that he had been manipulating share prices after they soared over 7% following his tweets. Likely due to the threat of being removed from his position as CEO of Tesla, he has signed a settlement with the SEC.

The settlement requires that he step down as chairman of the company for a minimum of three years and that a new “independent chairman” be appointed within 45 days. Both Musk and Tesla have agreed to pay $20 million, though that isn’t that much for either of them considering Musk’s net worth is around $20 billion and Tesla’s is somewhere around $50 billion.

Or was, that is. Tesla’s shares have dropped 14% since the SEC’s announcement of their lawsuit. In August, Tesla’s shares rose by around 7% following Musk’s tweets that Saudi Arabia would be taking Tesla private at a 20% premium over that day’s closing share price, but they’ve fallen a total of 30% since then.

It is somewhat surprising that Musk has reached an agreement with the SEC – Friday brought the news that he had backed out at the last minute from a settlement that would have had him step down from chairman for only two years. The reason he didn’t sign it was because “he felt that by settling he would not be truthful to himself,” and would be accepting a blemish on his reputation.

Both settlements did not require either party to confirm or deny the SEC’s allegations that Musk had not in fact “even discussed, much less confirmed, key deal terms, including price” with Saudi Arabia. Rather amusingly, the SEC also said that Musk had reached $419 by assuming that 20% was a “standard premium” but then rounded up the price to $420 because he “had learned about the number’s significance in marijuana culture.”

Musk really needs to learn how to avoid ‘marijuana culture’ – Tesla’s shares also fell by 9% after he smoked one puff of weed on “The Joe Rogan Experience” YouTube podcast three weeks ago.

It appears this settlement isn’t really a win for anybody. Musk gets kicked out of his chairman position. Tesla shareholders lose several billion in total as shares go down. Musk isn’t forced to resign from CEO as the SEC wanted. And Saudi Arabia still only has 5% of Tesla shares, though they did recently invest $1 billion in the electric car start up Lucid Motors.

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https://www.techspot.com/news/76690-elon-musk-has-agreed-step-down-tesla-chairman.html

 

[ForgottenLegion]

Musk seems quite naive but ultimately what does this solve?

Does anyone think this will change what Musk does with the company?
Surely he won't be 'chairman' in name but as CEO he's still gonna be calling the shots.

If not for whatever reason I guess Space X will get more attention.

Eh, the establishment on one side and an eccentric billionaire on the other, hard to care much either way.

 

[JaredTheDragon]

Does anyone think this will change what Musk does with the company?
Surely he won't be 'chairman' in name but as CEO he's still gonna be calling the shots.

He's never "done" anything with the company, except Public Relations. He's a front man only - same with SpaceX. He's a fraud and it looks more and more like he was hired to tank these companies, not lead them.

 

[ForgottenLegion]

He's never "done" anything with the company, except Public Relations. He's a front man only - same with SpaceX. He's a fraud and it looks more and more like he was hired to tank these companies, not lead them.

Well then that would explain his behaviour.

Here I was thinking he was the tech visionary the world needs so badly.
Something akin to Peter Wayland from the Aliens universe.

 

[MilwaukeeMike]

Does anyone think this will change what Musk does with the company?
Surely he won't be 'chairman' in name but as CEO he's still gonna be calling the shots.

He's never "done" anything with the company, except Public Relations. He's a front man only - same with SpaceX. He's a fraud and it looks more and more like he was hired to tank these companies, not lead them.

His company (which he didn't start, but was hired to lead) has pushed the entire industry farther ahead in electric car technology. GM/Toyota/Ford etc, they ALL are scared of Tesla leap-frogging them with electric and self-driving cars. Tesla is pushing them all to be better.

He is driving the company, closing the deals that sign loans that pay for everything until they're profitable, and he's hiring all the talent that's actually pulling off building the cars.

It's too early in his career to really say this, but he's the probably closest thing to Steve Jobs that exists right now.

This is a HUGE setback for them. Luckily all the others are already competing and this won't slow them down.

 

[wiyosaya]

Does anyone think this will change what Musk does with the company?
Surely he won't be 'chairman' in name but as CEO he's still gonna be calling the shots.

He's never "done" anything with the company, except Public Relations. He's a front man only - same with SpaceX. He's a fraud and it looks more and more like he was hired to tank these companies, not lead them.

His company (which he didn't start, but was hired to lead) has pushed the entire industry farther ahead in electric car technology. GM/Toyota/Ford etc, they ALL are scared of Tesla leap-frogging them with electric and self-driving cars. Tesla is pushing them all to be better.

He is driving the company, closing the deals that sign loans that pay for everything until they're profitable, and he's hiring all the talent that's actually pulling off building the cars.

It's too early in his career to really say this, but he's the probably closest thing to Steve Jobs that exists right now.

This is a HUGE setback for them. Luckily all the others are already competing and this won't slow them down.

I disagree. Everyone else is taking the time to do pure research, the kind of research that is needed to push the technology farther along. Musk is using off-the-shelf parts that are current technology and not quite up to the task - especially the battery technology.

If you have been following the others, they are dong that pure research with battery technology, and all signs are that they are further ahead than Tesla. Instead of building cars that are not-yet-ready-for-prime-time with technology that is not up to the task and putting junk on the market. they taking the time to do it right.

If you want to think that Musk is some godsend visionary genius, that is your prerogative, however, to me, he is a charlatan who's vision is far beyond what he and the technology is currently capable of. Each thing that he has announced, mars colony, especially, is a grandiose vision that is of questionable feasibility with current technology, thus, more often than not, Musk's visions while sounding fantastic are delusional. He has already walked back the Mars colony, his satellite internet, Tesla has extreme problems manufacturing their vehicles, the jury is still out on the hyperloop and what he claims he can do with the boring company.

On top of that Tesla is hemorrhaging $1bn, yes, $1. billion dollars a month. It is not my idea of genius or visionary leadership. To me, it is someone who is pulling ideas out of his a$$.

 

[cliffordcooley]

Musk is using off-the-shelf parts that are current technology and not quite up to the task - especially the battery technology.

That doesn't mean a thing. When no one else has pursued the same direction.

What the hell do you think PC manufacturers do? They don't make any of their parts either. Everything they use is off the shelf parts. I'd wager the larger portion of manufacturers do the same.

God damn get off his case already. You and captaincranky act like he raped both of you as a kid or something. It doesn't reflect good on your personality. If any one had a legitimate complaint, all this BS would cloud it over and no one would notice.

 

[Puiu]

I kinda agree with @cliffordcooley on this one. Some people just have a hate boner for Musk for some of the weirdest reasons.

 

[tipstir]

Let's not forget it's also an Actor. He's been in a few movies I've seen him in. It's all PR stuff now he has Auto and Aerospace company. He's still one of riches man today. Step down or step up does it really matter what this guy does? Nope but to make the stockholders happy at his Electric Car Company satisfied after the pot smoking and drinking didn't do his reputation so well to the eye lookers. Again he really has mess up this time. Money can't get him out of this pickle jar this time.. See you back in 3 years at your Electric Car Company... I got my eye on Fuel Cell is a better way to go instead..

 

[erickmendes]

“considering taking Tesla private at $420.”

A man can't make marijuana jokes any more...

 

[mbrowne5061]

Musk is using off-the-shelf parts that are current technology and not quite up to the task - especially the battery technology.

That doesn't mean a thing. When no one else has pursued the same direction.

What the hell do you think PC manufacturers do? They don't make any of their parts either. Everything they use is off the shelf parts. I'd wager the larger portion of manufacturers do the same.

God damn get off his case already. You and captaincranky act like he raped both of you as a kid or something. It doesn't reflect good on your personality. If any one had a legitimate complaint, all this BS would cloud it over and no one would notice.

Car manufacturing is a combination of several different kinds of engineering. Building custom parts yourself when you need to, and buying off-the-shelf from a supplier when you can. Take Toyota for example. They build their engines, transmissions, frames, and bodies - generally - but they go to GM for things like the power steering pump, radiators, etc, and Bosch for things like wiper blades and electrical sensors. Toyota built the parts that made it a 'car', and bought the rest. Now, I have friends at Tesla, and they tell me that aside from the frame, Tesla is doing the exact opposite. They're buying the motors and licensing the batteries, and designing things like door handles and hinges. This is why they are hemorrhaging money and missing deadlines. Musk has no idea how to run a car company; they're building the things you never expect to see a return on and always expect to see contribute to product overhead, and they're buying the parts you should and could be building yourself to save money and differentiate yourself from your competitors.

Just watch, Toyota and GM are going to start putting out electric cars in the next few years that outperform and undercut Tesla's entire lineup, expect maybe at the highest of their high-end. They will have designed their own motors and batteries, and bought their hinges and shocks, and it will show in terms of both price and performance.

 

[MilwaukeeMike]

I disagree. Everyone else is taking the time to do pure research, the kind of research that is needed to push the technology farther along. Musk is using off-the-shelf parts that are current technology and not quite up to the task - especially the battery technology.

If you have been following the others, they are dong that pure research with battery technology, and all signs are that they are further ahead than Tesla. Instead of building cars that are not-yet-ready-for-prime-time with technology that is not up to the task and putting junk on the market. they taking the time to do it right.

If you want to think that Musk is some godsend visionary genius, that is your prerogative, however, to me, he is a charlatan who's vision is far beyond what he and the technology is currently capable of. Each thing that he has announced, mars colony, especially, is a grandiose vision that is of questionable feasibility with current technology, thus, more often than not, Musk's visions while sounding fantastic are delusional. He has already walked back the Mars colony, his satellite internet, Tesla has extreme problems manufacturing their vehicles, the jury is still out on the hyperloop and what he claims he can do with the boring company.

On top of that Tesla is hemorrhaging $1bn, yes, $1. billion dollars a month. It is not my idea of genius or visionary leadership. To me, it is someone who is pulling ideas out of his a$$.

I know their batteries come from Panasonic - I know people have quit... I know he's been divorced like 3 times... I know if you ever tell him that something 'can't be done' you'll get fired on the spot.

I'm not going to get into whether he's a visionary or genius or any of that. But consider this... if he weren't - would we even know his name?

History is full of drastic moves forward in society/technology etc that have started as a 'delusional' idea that most people thought was crazy.

As for losing money. Amazon lost money for years and years before making any. Growing is more important than profits when a company is getting started.

If you want evidence that he's not that great a leader - look no further than the stock price spiking upward yesterday.