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Tesla founder and CEO, Elon Musk, has stepped down as chairman of the American electric car company. However, he will still remain as the CEO of Tesla Inc. Besides losing his chairman position, he'll also have to pay a total of 40 million dollars as fine. In addition to Tesla, Elon Musk is also the founder of SpaceX, SolarCity and The Boring Company.
Tesla is one of the most shorted stocks (bought and sold immediately in a belief that it can be got back at a lower price later and returned to the lender; hence pocketing the difference) made in the history of the entire trading field. The company is also facing some loss currently.
Musk wasn't happy with this and on August 7th, he tweeted saying that he is taking the company private and has even got the required funding. The main financier was reported to be Saudi Wealth Fund.
The tweet, although boosting Tesla's stock value, impacted those who were shorting it. However, the stock gains didn't continue for long and the country's Securities and Exchange Commission (SEC) started an investigation. The unusual mode (tweeting) of sharing information of a listed company set the investigation spree.
To make things worse, the supposed funding wasn't secured. Saudi backed out and the statement made by Elon in his tweet ended up being a false claim.
Finally, the SEC investigation made him step down and can even lead to a ban on heading a public company, for a brief period of time. Without a second option, Elon had to settle up the case. However, he has to personally shell out 20 million dollars as fine and another 20 by the company, in return of thestock.
Furthermore, Elon Musk has to sign an agreement to neither "admit or deny" his guilt — misleading investors through his false statement. He will still be the face of Tesla with his CEO position.
Thoughts On Elon Musk Stepping Down As Tesla Chairman
Elon Musk has had his fair share of controversies over the years but this is the first time it has cost him an important position in the company. The successful businessman and visionary can be regarded as one of the main people responsible for thecurrent trend of electric cars. Tesla makes the best electric cars in the world and is expected to make a strong statement in developing markets such as India, in the not-too-distant future.