By Viraj Mehta

The last few weeks haven’t been the best for Tesla and its founder Elon Musk, who faced a lawsuit from the Securities and Exchange Commission (SEC) regarding his unpopular contrarian tweets in which he mentioned his thoughts to take Tesla private.

This came as a great shock to investors who frantically scrambled to short Tesla stock, leading to its share price plummeting from $307 to $270 when markets closed on Friday 28th September. Musk made sure to add that he had “secured funding” for the proposal to delist Tesla from the Stock Exchange, which would value Tesla at $420 per share.

Elon Musk clearly smoking marijuana

Elon Musk clearly smoking marijuana

Musk’s comments were initially thought by many to be a joke due to the connotations of the number 420 to marijuana. Similarly, Musk’s erratic behaviour, demonstrated by his smoking of such a drug during a podcast, as well as his frivolous tweeting has led to some distrust amongst shareholders.

The repercussions of Musk’s threat of taking Tesla private have been bad. Earlier this week, after negotiating with the SEC, Tesla settled the suit with a loss of $7bn. The agreements stated that Musk would have to step down from his position as Chairman for 3 years, whilst being able to remain on the board of directors and stay CEO.

Musk must also pay a personal $20 million fine as well as an equal sum, to be levied on Tesla. The SEC also ordered that two new directors be added to the board. This was a big blow to Tesla, and to Musk’s reputation, as they both lost a significant amount of money and prestige.

Tesla have, however, largely recovered from their loss, opening the week with $308 per share and being on course to hit their production targets for the third quarter. They have already produced 51000 models as we approach the end of Q3.

Overall, Tesla has had a rocky third quarter this year, after facing backlash from the SEC as well as multiple fines. Despite this, it has fought its losses and continued to regain momentum, upholding its image as a leading electric vehicles manufacturer.

Nevertheless, Musk must also be regretting the 140 characters he shocked the world with in the summer, and although he will cease to be Chairman, Tesla will continue to profit from his leadership.