Elon Musk tweets that SEC is "broken". What would it take for Tesla to be done with him?


He is now fighting the Securities and Exchange Commission, which may seek to deprive him of his position at Tesla.

The SEC on Monday urged a federal court to condemn Musk in contempt for violating an agreement reached in October. Musk tweeted last week that Tesla would build 500,000 cars this year. It was wrong: You're here (TSLA) said that it would only produce about 400,000 cars during the year. Musk had not received Tesla's approval to send his tweet. This violates the agreement, according to the SEC.

The regulator did not specify the sanctions it would seek if it were found to be in contempt of court, but it had already tried to remove Musk from his role as CEO. Last year, Musk falsely tweeted that he had secured funding to privatize the company. In the October deal, the SEC authorized Musk to retain his position as chief executive, but agreed to relinquish his position as chairman of the board of directors. He also needed to obtain prior approval of Tesla's social media publications on company information that was "important" to investors.

The decision to remove Musk as CEO is not under the SEC; it would be up to a judge. Or the Tesla board might decide to unplug Musk when he decides he 's tired of it.

Musk is a loose cannon

Musk is without a doubt the genius of electric cars built by Tesla. But he is also the driving force behind the volatility of Tesla's shares and the revolving door of the company's most senior executives.

For example, Tesla's chief counsel resigned one day after the February 19 Musk tweet that got him into trouble with the SEC. Last year, Tesla's chief accountant left after less than a month of work after his tweet "secure financing". The company has also lost the best engineers.
Yet, Musk showed no remorse. He continued to tweet about his aversion to the SEC after filing the court record, saying, "Something is wrong with SEC supervision."

Even the Tesla bulls are starting to shake their heads.

"We expect the debate on whether Tesla is better without Musk coming back," said Gene Munster, a technical analyst, managing partner of Loup Ventures, in a blog post.

"Musk's behavior remains carefree," Munster wrote. "In this case, the tweet was not as carefree as the lack of respect for the process that he had agreed to when settling in October."

Munster's comments are particularly keen, as Munster is a long time supporter of musk.

Musk seems well enough isolated not to be thrown from his own company. He chose the board of directors, including his brother, fellow billionaire Larry Ellison and the new president of the company.

A spokesman for Tesla declined to comment.

Musk a mixed bag for Tesla

Munster said the company had reason to consider a new CEO.

If Musk left, Tesla could more easily recruit and retain senior executives. This would reduce the volatility of the security. Tesla shares fell 3% on Tuesday.

In a note to investors, Daniel Ives, an analyst at Wedbush, said that he remained "concerned that this issue is another source of distraction for Musk & Co. because the company is going through a financial crisis. the most difficult periods of its history and this certainty does not need this news ".

Musk's antics are a distraction for the company. He spends many hours at Tesla, sometimes at the factory, but he also runs two other companies: SpaceX and Boring Company.

But Munster thinks that Musk is irreplaceable. Staying with Tesla would be a net benefit for the company. His vision of products, his pace of innovation and his exceptional customer experiences are not easy to replicate.

The miserable week of Tesla ends on a positive note
The execution of this vision has often failed. Tesla is famous for its deadlines and missing goals. And last week, Consumer Reports, who loved its cars during roadside tests conducted by its staff, once again stripped one of its cars, the Model 3, from its "recommended" rating because of problems with reliability and maintenance reported by Tesla owners during investigations.

Nevertheless, the current owners of Tesla are among the biggest fans of Musk. According to Consumer Reports, despite maintenance issues, customers are more satisfied with their purchases than owners of any other car brand. Customers treat Musk as a rockstar. That's one of the reasons why the question of whether Musk will stay or leave is so important.

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