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Last Thursday, the SEC announced that I was charging Tesla (TSLA – Free Report) CEO Elon Musk, accused of fraud as part of his tweet of August on the privatization of the company and the "secured financing". The SEC complaint described this communication as "false and misleading".
Subsequently, it was reported that Musk and the SEC had been close to an agreement that would have allowed him to pay a fine, admit or deny his guilt and be prevented from acting as chairman of the board. Tesla for two years. Musk apparently decided not to take the deal on 11e time, causing the SEC to file the complaint.
Shares plunged 13% in overnight trading, Thursday and throughout the day Friday, closing at $ 264.77.
Although the specific nature of the negotiations has not been made public, Musk concluded over the weekend an agreement with the SEC in which he will personally pay a fine of $ 20 million, resign from his post for 3 years. The company will also pay a $ 20 million fine – for failing to control Musk's communications with the investing public – and Musk will remain CEO.
On Monday, shares climbed 16%, essentially eliminating Thursday and Friday sales. Tesla bonds also advanced on Monday, reducing the yield of the company's convertible bonds due in 2025 by more than 50 basis points.
Despite the temporary distraction of litigation and settlement, the result leaves investors more confident about the future direction of the company. While Musk leaves the board but remains CEO, Tesla will still benefit from his creative vision, but he will also be somewhat forced to answer a board of directors that will demand accountability.
Production and deliveries
With the combination of SEC apparently behind Tesla, all eyes are once again focused on the company's ability to produce and deliver Model 3 consumer vehicles in the third quarter of 2018 and beyond. Tesla has set a target of producing 50,000 to 55,000 models 3 in the third quarter, which would be an important step on the road to sustained profitability.
Tesla does not report monthly production figures and third quarter financial results are still more than a month away, but the company recently released quarterly production figures in a new quarter. the cars that they were able to produce and deliver on Monday or Tuesday.
The Electrek electric blog, citing unnamed sources, now predicts that Tesla will have produced about 53,000 models 3 in the third quarter and 80,000 vehicles in total. Deliveries could actually exceed these numbers as Tesla had thousands of finished cars in inventory by the end of the second quarter.
Although it is not wise for the company to officially announce that it had "played" federal regulations, it is speculated that Tesla has avoided delivering 200,000e vehicle until June 30e, a measure that would have the effect of preserving the entire federal tax credit of $ 7,500 per vehicle until 2018 and save some $ 300 million of customers per year, assuming 80,000 cars per month. (The credit is reduced to $ 3,750 two quarters after the delivery of 200,000 cars.)
Musk told employees in an internal communication over the weekend that the company was about to be profitable and prompted them to "perform very well" in production and deliveries in the final days of the quarter . "If we do everything we can tomorrow (Sunday)," writes Musk, "we will win an epic victory beyond all expectations."
Although investors will have to wait until early November to obtain audited financial statements that break down the significant figures in gross profit and net profit, the production figures released earlier this week will provide a better understanding of Tesla's ability to finally achieve its bold goals.
Stay tuned …
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