Tesla shares soar after Musk settles with SEC


Under the terms of the settlement, Musk and Tesla neither admit nor deny the SEC's allegations.

Tesla's stock price has swung sharply since Musk tweeted in August he was thinking of taking the company private. That's above the level it held during Thursday's trading hours, just before the SEC announced that it was charging Musk with securities fraud.

Tesla CEO Elon Musk urged employees to "go all out" in the final day of the third quarter, as the electric-car maker pushed to meet ambitious production goals for the Model 3. In the settlement, Elon Musk is to pay a $20 million fine and Tesla will also pay a similar amount separately, totalling the fines to $40 million.

Musk said in a tweet in May that the company would need to sustain production of 5,000 Model 3s per week to make a profit on the critical vehicle and to survive. The SEC claimed that Musk knew the funding was not secured.

Musk, a co-founder of Tesla, is the company's largest stockholder, owning approximately 22 per cent of its outstanding shares.

According to the agreement filed on Saturday, Musk must resign as chair within 45 days.

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Following the announcement that Musk would settle and step down as chairman, Tesla's stock stabilised after its 14 percent drop, shooting back up 15 percent at $305 per share.

The settlement with the SEC won't be the end of the matter, though, as Musk is also facing a series of class action lawsuits relating to the tweets.

By allowing Musk to stay on as CEO under the settlement, the SEC has avoided the possibility that removing Musk from Tesla could cause investors to lose faith in the company's ability to thrive without him, potentially leading to more instability in its share price and value.

In the last week of the quarter, we produced over 5,300 Model 3 vehicles, nearly all of which were dual motor, meaning that we achieved a production rate of more than 10,000 drive units per week.

Gore, also a well-known environmental activist who starred in the award-winning climate change documentary "An Inconvenient Truth", would indeed be seemingly aligned with Musk and Tesla's mission to put more electric cars on the road.

The company is expected to release quarterly production numbers this week for the Model 3, seen by analysts as crucial to the carmaker's drive to achieve long-term profitability.