By Mason Mohon | @mohonofficial
Tesla and Elon have had a rough time as of late.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
Musk’s little trick to impress his girlfriend was not pleasing to the SEC. Neither was his subsequent appearance on Rogan, in which he decided to smoke marijuana on what essentially amounted to national television. After these events and a concern over Saudi Arabian tomfoolery, the SEC went ahead and sued Elon Musk.
According to the SEC report, Tesla stated that “it intended to use Musk’s Twitter account as a means of announcing material information to the public about Tesla and its products and services and has encouraged investors to review the information about Tesla published by Musk via his Twitter account.”
Clearly, they hit right on the money.
I remember when I was a sponge. Simpler times they were.
— Elon Musk (@elonmusk) November 3, 2018
Had to been done ur welcome pic.twitter.com/7jT0f9lqIS
— Elon Musk (@elonmusk) October 19, 2018
The 420 Tweet caused Tesla’s stock price to go up by 11%, but the SEC suit directly counteracted this performance. Musk’s Twitter antics reportedly “caused significant confusion and disruption in the market for Tesla’s stock and resulting harm to investors.”
Elon was understandably unhappy with the suit. The suit left him “deeply saddened and disappointed.” He moreover stated that he has “always taken action in the best interests of truth, transparency, and investors. Integrity is the most important value in [his] life and the facts will show I never compromised this in any way.”
The settlement resulted in Musk having to pay $20 million and an end to his position as chairman of his company’s board. He will, however, be able to seek re-election in 3 years and remains as the CEO, but the settlement is a blow to Musk nonetheless.
Dark Predictions for Tesla
Tesla has not been doing well either. Jeff Reeves of Market Watch made clear that he thinks Tesla has tough times ahead. This comes amidst declines in stock prices and trouble producing favorable news about the Model 3.
More recently, Business Insider echoed this sentiment. They made abundantly clear that people should not listen to anybody who doesn’t think Tesla’s stock price is “ridiculous”. They also explained that the debate surrounding the company was merely “between short-sellers who don’t understand its business and a new class of tech bulls who … don’t understand its business.”
Conversely, things may be looking up for Tesla and Musk, especially when it comes to the Model 3. Last quarter, the vehicle managed to be the 19th top selling car in the United States. This provides an interesting disruption to the status quo of leading cars. It also allows us to question if Tesla actually is in the downward tailspin we all perceive.
Between July and October, Tesla managed to sell 56,065 Model 3’s, securing the number 19 spot. Wired explains that this is the moment that the company moves beyond its niche. Tesla’s sales and production are up, and it was the fourth best-selling luxury car last quarter. The company seems to be on an upward trajectory.
It is unclear if Tesla will be able to turn this momentum into sustainability. As production of the Model 3 rises, so does the cost. Whether or not Tesla is able to lower prices and keep sales up is unknown. But the ship may be turning around.
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