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On Saturday night, Elon Musk was reprimanded by federal regulators, agreeing to quit his position as President of Tesla and having his communications checked.
But Mr Musk, the exuberant and relentless executive director of billionaire Tesla, showed no immediate sign of change of style.
On Sunday, at 1:08, just hours after clearing the Securities and Exchange Commission fraud case, resulting from his impulsive tweet on Aug. 7, Musk sent an email to all Tesla employees. He implored them to work hard, even if it was the weekend.
"One more day of super hardcore and victory is ours !!" he wrote. "We are very close to achieving profitability and proving that the opponents are wrong, but to be sure, we must really do well tomorrow (Sunday). If we do our best tomorrow, we will win an epic victory that will exceed all expectations. Go Tesla !!!
Despite Musk's enthusiasm late tonight, Tesla will face many challenges in the coming months.
The company is still struggling to produce and deliver its 3 models, which are key to its financial future. It is short of money and has imminent deadlines for paying the bonds. Short sellers are still targeting the company, betting on the downside. The second. continues to review the company's past claims about its production goals, and the Department of Justice has also reviewing Mr. Musk's tweet.
And Mr. Musk himself – who also runs SpaceX and the Boring Company – remains a wild card, subject to unpredictable behaviors that often trap his various companies.
"I have the impression that the SEC wants to have more adults in the room," said Peter Henning, a law professor at Wayne State University, who contributes to the DealBook section of New York. Times. "But will Musk listen to them?"
Neither the company nor Mr. Musk issued a statement formally commenting on the settlement.
For the past 10 years, since Mr. Musk became General Manager of Tesla, he and the company have been virtually synonymous. It is the driving force, setting its strategic direction, taking virtually all the important decisions and working on almost every detail of design and manufacturing.
Its intensity and fierce work ethic have led to a wave of executive departures in recent years. Tesla's board of directors – which includes Mr. Musk's brother, Kimbal – is not particularly independent from the point of view of most large corporations.
The terms of the S.E.C regulation are meant to change some of that.
Tesla will need to add two independent directors to the Board, Mr. Musk will no longer serve as Chairman for three years and the Board will have to establish a standing committee to oversee Mr. Musk's communications with investors and the public including: posts on Twitter and other social media. The members of this special committee will be subject to the review and approval of the S.E.C.
Tesla must also "put in place mandatory procedures and controls to oversee all of Elon Musk's communications regarding the company, regardless of format," according to the settlement. The second. will monitor to ensure that the company is in compliance with these procedures.
Some critics of the settlement suggest that the S.E.C – seeking to bar Musk from being a director or officer of a public company in a lawsuit filed Thursday, two days before the settlement – let him go.
President Jay Clayton's remarks about the deal added to the perception that regulators were making an exception for Musk, who plays such a central role in Tesla. Mr. Clayton said that it was necessary to balance the penalties for violating securities laws with "the skills and support of some people" that may be important "for the future success of the company." ;a company".
But Rebecca Roiphe, a professor at the New York Law School, said that sending Musk back to a leadership position in the company would have been a mistake.
"I think banning him as a CEO would have been disproportionate given what he's done and that he's the founder, the largest shareholder and the brains of an innovative company" , she said. The second. is a civilian regulator, she noted, whose goal is to protect investors. "Although he shares some of the goals of federal prosecutors, his mission is different."
The fury after Mr. Musk's message on Twitter in August, he had secured a "secured financing" for a buyout of the electric car company at $ 420 per share, which distracted Tesla's attention from its products and its balance sheet.
The email sent by Mr. Musk to employees was less optimistic than the previous forecast he had proposed for the quarter. Since the end of June, he insisted that Tesla would report positive earnings and cash flow in the third and fourth quarters.
But over the last few weeks, Tesla has cut costs and stopped spending in the hopes of generating profits with the increase in Model 3 sales. In June, the company laid off 9% of its workforce for reduce costs and recently stopped offering model 3 in certain colors. He also delayed payments to suppliers. At the beginning of the third quarter, it owed $ 3 billion to suppliers.
"It's hard for me to believe that they will be profitable by traditional standards," said Karl Brauer, executive publisher of automotive information providers Autotrader and Kelley Blue Book. "You can be very creative in your accounting in defining profitability and in including or not certain costs."
While many analysts have focused on the number of models 3 built by Tesla, a bigger indicator now is the number of cars it is able to deliver. Unlike other manufacturers, Tesla does not generate revenue just by making cars.
It does not collect any income until it is delivered to customers. Companies like Ford and General Motors record their revenue when cars are shipped to dealerships.
Serious delivery problems would slow Tesla's revenue growth, even if it is able to increase the number of cars it manufactures, and in recent weeks, Tesla has struggled to ship cars to end customers.
On September 16, just nine days after stating that the company was experiencing a remarkable quarter, Mr. Musk acknowledged in a tweet that it was a "hell in delivery logistics" . Delivery problems have become so severe that Mr. Musk has suggested to current volunteer owners to assist in delivery centers across the country.
"The difference between a niche builder and a volume builder is vast, and as you progress, it can be very expensive to deliver each car to each customer," Brauer said.
Analysts will also be watching closely to see if Tesla's third quarter results meet Mr. Musk's stated goal of generating positive cash flow. In the second quarter, Tesla lost $ 742.7 million and used more than $ 430 million of its remaining cash, reducing its cash offer to $ 2.2 billion.
Concerns about Tesla's cash are all the more relevant as Tesla is expected to make a $ 230 million bond payment in November. A second bond payment of $ 920 million is expected in March. He may discharge this obligation with shares, but only if the share price is greater than $ 360. On Friday, the stock closed at $ 265 after falling 14% in one day, following the announcement that the S / C had filed a lawsuit for securities fraud against Musk.
While Tesla faces a decisive earnings report of about a month, analysts and the CBS – will also follow Musk's remarks and tweet to see if Tesla's governance has changed.
In fact, according to S.E.C.'s instructions, Tesla's board of directors must now keep Mr. Musk to make sure that he does not say anything that might cause him or her trouble.
"I'm generally not a fan of this type of governance arrangement," said Jill Fisch, a professor at the University of Pennsylvania's Faculty of Law and a specialist in corporate governance. "But in this case, these seem quite specific and well suited to the driving that causes concern."
Emily Flitter contributed to the reports.
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