Tesla is 'very close' to profitability, Musk says in staff email

Elon Musk to Resign as Chair of Tesla Board but Remain CEO

Elon Musk to Resign as Chair of Tesla Board but Remain CEO

The news of Tesla CEO Elon Musk settling with US financial regulators sent the company's stock soaring Monday morning.

In any case, the $40 million, which will be distributed to harmed shareholders after a court-approved process, are but a very small fraction of the more than $7 billion lost due to the whole debacle.

The US Securities and Exchange Commission said on Saturday that car-maker Tesla and Chief Executive Elon Musk had agreed to pay $20 million each under a settlement that will also see the billionaire step down as chairman after a tumultuous two months for the company. Musk said August 7 in a company blog post that he was considering taking Tesla private at $420 per share, representing a 20% premium over the stock price following the company's second-quarter earnings release. The shares closed Thursday at US$307.52 before the SEC announced its enforcement action over the tweets, in which Musk said he had "funding secured" to take the company private at US$420 a share.

The agreement allows him to stay on as the chief executive of Tesla, although he will have to hand over the reins as chairman of the board and must pay a $20m (£15m) fine to settle fraud charges. Tesla is required to appoint two new independent directors to its board.

Musk has said the company needs to produce 7,000 cars a week to make money, a target he aimed to reach in the July-September quarter. He concluded the post saying that the "proposal to go private would ultimately be finalized through a vote of our shareholders".

You see, even with offerings like the Toyota Prius and Nissan Leaf, the idea of a market-friendly electric vehicle that's both stylish and fun-to-drive has never been more mainstream than it has with Musk and Tesla leading the charge. The funding had not been secured. But the SEC wrote in its complaint that "Musk's statements were premised on a long series of baseless assumptions and were contrary to facts that Musk knew". Neither Musk nor Tesla admitted or denied the SEC's findings as part of the settlement.

Emily McCormick is a reporter for Yahoo Finance.

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