Elon Musk's decision to give up the chairmanship of Tesla and pay a fine to the United States financial regulator over his Twitter announcement that he was going to take the electric vehicle group private sent the shares up by almost a fifth.
Now, the company has to hire a chairman to replace Musk (something corporate governance experts have suggested for years), along with 2 new independent directors.
Neither Musk nor Tesla admitted or denied the SEC's findings as part of the settlement, which still must be approved by a court.
But several experienced litigators also said that, while the DOJ probe is separate, the SEC's settlement might mark the end of official action against Tesla and Musk. Tesla has recently navigated numerous resignations among senior staff and a now-settled lawsuit with the SEC over insider trading following CEO Elon Musk's Twitter-induced manipulation of the stock price.
The settlement comes just two days after the SEC sued Musk for fraud and sought to block the way of entrepreneur from running affairs of Tesla or any other publicly-traded company. He is staying on as CEO, but gives up his chairmanship.
Rows of new Tesla Model 3 electric vehicles are seen in Richmond, California, U.S., June 22, 2018. But Musk has pledged to post profits in future quarters. We also want to thank all of our customers who volunteered to help us with deliveries, and our new customers who are showing their faith in Tesla by purchasing our products in such large numbers. The "false and misleading" claims, as the SEC called them, risked misleading investors into thinking the company already had the funding to go private.
Fortnite Season 6 Brings Adorable Pets
In Shadow form, you'll also be able to run faster, jump higher, avoid fall damage and even pass through walls and ceilings. And then there's the new Shadow Stones - they are scattered throughout the map , letting you go completely invisible.
Tesla shares briefly rose at the opening bell before falling about 1 percent, to $307.82.
Looks like one careless tweet has costed Musk dearly!
Investors anxious that heralded a long-drawn out fight with the regulator that would see Tesla lose its talismanic leader, undermine its ability to raise capital and cripple operations as it ramps up production of its crucial Model 3 sedan.
Now attention is likely to shift to the figures for production and delivery of Tesla's electric cars, and particularly its Model 3 midsize sedan.
The Commission said Musk sent the tweet even though he "allegedly knew that the potential transaction was uncertain and subject to numerous contingencies", causing "significant market disruption".