Why Elon Musk Resigned as President of Tesla
If Elon Musk had imagined the consequences of his single tweet, he would surely have thought more carefully.
The whole story that led to his resignation as president of Tesla, in fact, began in August; when the founder of the electric supercar company made it known on Twitter that he “is considering making Tesla private at $ 420 per share“.
The idea was to regain control of the company, recovering all the shares with the help of some partners, including the Saudi sovereign wealth fund and then withdraw it from the stock exchange. The problem is that the companies listed on the stock exchange must comply with very specific rules, also with regard to communications that may affect their value on the stock exchange. And it is precisely for this reason that the SEC (Security and exchange commission, the US control body, the equivalent of our Consob), following Musk’s tweet, immediately straightened its antennas; accusing him later of having made “false and misleading” statements and not having met the requirements of a publicly traded company.
The SEC decision was also dictated by the fact that Musk did not provide, in the tweet or later, no financial details on the announced transaction; especially since as discovered by the SEC , no real agreement with the Saudi fund had really been taken. In a nutshell, his post on Twitter may have influenced the stock market performance of the company without anything concrete actually happening.
Immediately after the SEC accusations, it seemed that Musk and the entire Tesla board of directors were ready to fight; instead according to what was first reported by the Washington Post on Saturday the early surrender came. Musk has agreed to an agreement that both he and Tesla pay $ 20 million in fines each, and that Musk renounces his role as president for at least three years. Musk will remain in the company anyway, since it will retain the role not exactly secondary of CEO. The entrepreneur has 45 days to resign.
Tesla, for its part, will have to commit to adding two new independent members to the board of directors and more closely monitor the social communications of Musk.
First the completely unfounded accusation of “pedophilia” against one of the rescuers of the Thai children who were stuck in a cave; then the decision to smoke a cane during an interview with a podcast (causing the stock to collapse temporarily) and the accusations of rapper Azealia Banks to be one who posted on Twitter after making LSD (accusations rejected, of course). Not only that: in an interview with the New York Times it is described as one that “alternates laughter and tears”; suggesting in some way that his psychological condition is not the most stable. If that was not enough, several Tesla executives have recently dropped out of the company and there are some ongoing investigations into working conditions at the Fremont, California facility.
As a result of all this, Tesla’s shares lost a good 14%, closing on Friday at 264 dollars per share. All things considered, however, things could have been even worse: without an agreement with the SEC, the US authority could have prevented Musk from continuing to be a part of Tesla and any other publicly traded company. In this way, on the other hand, he will be able to continue to play the role of CEO and to effectively lead his company (but without possessing that freedom of decision that had been guaranteed to date); in the hope that he will at least partially give up his role as a media personality in constant search for attention and return to being that visionary entrepreneur who from Tesla to SpaceX, up to Hyperloop and Neuralink, is helping to shape the future.
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Hülya Karahan: The founder