Remember that time back in August when Tesla's CEO Elon Musk claimed that the company would go private at $420 a share? Well, what was apparently a joke has backfired, and the billionaire has to now pay a $20,000,000 fine for making false and misleading statements. Musk's response? "Worth it."
How would you spend $20,000,000? Would you go on a round-the-world vacation and then buy yourself a nice condo and a Ferrari? Or maybe you'd like to secure the future of your children with all that money and keep what's left for you. What Elon Musk will do with $20,000,000 is a bit different to whatever goes on in your head when you think about spending that kind of money.
That's because the CEO and Chairman of Tesla will have to pay a $20,000,000 settlement after the Securities and Exchange Commission hit him with fraud charges. Tesla will also have to pay $20,000,000. This may seem like a lot, but Musk shrugged off the verdict responding on Twitter that the 'joke' was worth it.
Keep reading to learn more about Musk's 420 moment
Was Musk's Mary Jane humor really worth it?
Back in August, Elon Musk blankly tweeted that he was "considering taking Tesla private at $420. Funding secured." This created a flurry of responses and many investors were left dumbfounded. Apparently, the funding was to come from Saudi Arabia's Public Investment Fund (PIF) which had already bought a 5% stake in the company and was looking for more. This is what Bloomberg wrote on the subject:
"The Public Investment Fund, which has built up a stake just shy of 5 percent in Tesla in recent months, is exploring how it can be involved in the potential deal, said the people, who asked not to be identified talking about the matter.
The PIF sees its investment in Tesla as a strategic way for the world’s biggest crude producer to hedge against oil, the people said. The Saudi fund hasn’t made any firm decisions on whether to increase its stake, or by how much, but talks are ongoing, they said. It wasn’t immediately clear how much the fund would invest in Tesla."
The information, though, had already been contradicted by a Reuters report which read that "A source who is familiar with PIF’s strategy said it was not currently getting involved in any funding process for Tesla’s take-private deal.
A second source close to the situation also said PIF was not taking part in any such plan at this stage. This source said that the Saudi fund would not make an investment of this kind without seeking guidance first from Softbank."
The convoluted situation, fueled by that '420' tweet, which was indeed "a reference to marijuana that he hoped would make his girlfriend laugh," as later revealed by NBC News, saw the Securities and Exchange Commission kick off an investigation on Musk and Tesla.
But the SEC didn't agree with Musk and Tesla and ultimately slapped both with a $20,000,000 fine. The fines, however, weren't the only thing ruled by the SEC:
"The settlements, which are subject to court approval, will result in comprehensive corporate governance and other reforms at Tesla—including Musk’s removal as Chairman of the Tesla board—and the payment by Musk and Tesla of financial penalties," according to a statement released by the commision. Musk has 45 days at his disposal to resign from his position as Tesla's Chairman.
According to Gizmodo, "without a settlement, the SEC would have sought to have Musk “be prohibited from acting as an officer or director” of a public company. As CEO, he will remain in charge of Tesla’s day to day operations."
->https://gizmodo.com/the-most-ridiculous-quotes-from-the-secs-lawsuit-agains-1829374774]
"Investors, stock analysts, and journalists immediately sought clarification of Musk’s August 7 statements. At 1:00 PM EDT, approximately 12 minutes after Musk published his tweet stating, ‘Am considering taking Tesla private at $420. Funding secured,’ Tesla’s own head of Investor Relations sent a text to Musk’s chief of staff asking, ‘Was this text legit?’"
“At approximately 1:13 PM EDT, a Tesla investor, and friend of Musk’s chief of staff texted the chief of staff, ‘What’s Elon’s tweet about? Can’t make any sense of it. Would be incredibly disappointing for shareholders that have stuck it out for so long.’"
At the end of the day, you decide: was it worth it? Is it just another one of Musk's many dividing comments that have kept him and Tesla in the limelight in the past few months or a sign of something else? Leave your thoughts in the comments section below!
Further reading
Tesla CEO Elon Musk Settles With SEC After Tesla Shares Take a Beating
Read more about Elon Musk.