Mexican Media Brands
Tesla Shares Sag after SEC Accuses Musk of Misleading Investors
Shares in Tesla Inc. dropped 14% to $263 by mid-afternoon today, wiping out more than $6 billion in market value for the electric carmaker.
#economics
Share
Shares in Tesla Inc. dropped 14% to $263 by mid-afternoon today, wiping out more than $6 billion in market value for the electric carmaker. Shares had closed below $308 on Thursday.
The decline was sparked by yesterday’s Securities and Exchange Commission lawsuit, which claims CEO Elon Musk harmed investors last month by announcing he had secured funding to take the company private at $420 per share.
Musk later backtracked, conceding he the necessary funding was not assured. A few days later he announced he no longer favors delisting the company. Musk also is the subject of a U.S. Dept. of Justice criminal investigation into possible criminal fraud about the would-be privatization move.
The SEC’s lawsuit before a federal district court in New York City asks, without mentioning Tesla by name, that Musk be barred from serving as an officer or director of any public company. Analysts say forcing Musk out of the company would further depress Tesla’s stock price and raise borrowing costs. Some analysts estimate that Musk’s presence at the company is worth about $130 per share.
Reports say that Musk rejected a settlement with the SEC earlier today that would have forced him to pay a small fine and step down as Tesla’s CEO for two years.
RELATED CONTENT
-
Tariffs on Autos: “No One Wins”
While talk of tariffs may make the president sound tough and which gives the talking heads on cable something to talk about, the impact of the potential 25 percent tariffs on vehicles imported to the U.S. could have some fairly significant consequences.
-
Inside Ford
On this edition of “Autoline After Hours” Joann Muller, Detroit bureau chief for Forbes, provides insights into what she’s learned about Ford, insights that are amplified on the show by our other panelists, Stephanie Brinley, principal analyst at IHS Markit who specializes in the auto industry, and Todd Lassa, Detroit Bureau Chief for Automobile.
-
China and U.S. OEMs
When Ford announced its 3rd quarter earning on October 24, the official announcement said, in part, “Company revenue was up 3 percent year over year, with net income and company adjusted EBIT both down year over year, primarily driven by continued challenges in China.” The previous day, perhaps as a preemptive move to answer the question “If things are going poorly in China, what are you doing about it?, Ford announced that it was establishing Ford China as a stand-alone business unit.