Elon Musk’s "Funding Secured" Tweet Just Cost Him & Tesla $40 Million

Elon Musk

Last week, the government charged Musk with making "false and misleading statements" to investors on his Twitter account when he said he had secured funding to take the company private.

At the same time, Tesla has also settled new charges of "failing to have required disclosure controls and procedures relating to Musk's tweets", and will also pay a penalty of $20m.

The stock's somewhat muted reaction may be a reminder of the position in which Tesla now sits-just past a trying period in which CEO Elon Musk agreed to step aside as chairman to settle an SEC lawsuit, and ahead of its third quarter financial results.

That settlement must still be approved by a court, and does not end the Justice Department probe disclosed by Tesla into Musk's tweets or lawsuits by short-sellers and other investors alleging losses and securities law violations. The shares closed at $307.52 on Thursday before the SEC announced its enforcement action over the tweets, in which Musk said he had "funding secured" to take the company private at $420 a share. The SEC was seeking to prohibit Musk from serving as an officer or director of a public company. "The resolution is meant to prevent further market disruption and harm to Tesla's shareholders".

That's a big increase on Q2 2018, when Tesla delivered 40,768 vehicles, and it's no doubt welcome news for a company that has been rocked by scandal of late. He is staying on as CEO, but gives up his chairmanship.

Jurgen Klopp explains angry post-match words to Xherdan Shaqiri
So far, we played Tottenham, PSG, Southampton and Chelsea so we are half-way through, and so far we did really well. If we had one 100% challenge out of the four or five we had, he wouldn't have been able to do what he did.

This weekend's settlement made clear that Musk was neither accepting guilt nor denying the SEC's allegations. During those three months, it built a total of 80,142 electric vehicles, of which 53,239 were the somewhat more affordable Model 3.

As of Friday afternoon, Tesla's stock price dropped by 14 percent to $264.77, erasing $7.3 billion in shareholder value.

If the company can meet targets, it will likely generate enough cash flow and profits that will underpin the company's future growth - without needing to go to the market for more funds any time soon. It was one of Elon's first tweets since settling with the regulatory agency.

Deliveries reached a record 83,500, above Wall Street estimates of 80,000 and including nearly 56,000 of the Model 3 sedan whose ramp-up is widely seen as crucial to the company's drive to become profitable.

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