Tag: Tesla

The 7 most eyebrow-raising details in the Elon Musk fraud complaint

The securities fraud complaint filed by the U.S. Securities and Exchange Commission against Tesla CEO Elon Musk contains an eye-opening view into the events leading up to the “funding secured” tweet heard round the internet. And luckily, TechCrunch has read through the document and highlighted the most compelling details, including new insights from the SEC’s… Continue reading The 7 most eyebrow-raising details in the Elon Musk fraud complaint

Tesla shares sink on fraud investigation

Media playback is unsupported on your device Tesla shares have sunk after US regulators took legal action against founder Elon Musk for alleged securities fraud. On Thursday the Securities and Exchange Commission filed a lawsuit over a claim made last month by Mr Musk that he had funding to take the company private. The billionaire… Continue reading Tesla shares sink on fraud investigation

Tesla shares plunge as Wall Street throws in towel, saying Musk departure could cost stock $130

Bobby Yip | Reuters
Elon Musk

Wall Street is buzzing over SEC's civil action against Tesla CEO Elon Musk, predicting significant negative ramifications for the electric car market due to the action.

Shares of the automaker were down 12 percent in Friday's premarket session.

The Securities and Exchange Commission sued Musk on Thursday, alleging for fraud. The complaint says Musk issued “false and misleading” statements and failed to properly notify regulators of material company events. Musk called the SEC's allegations “unjustified” and said he “never compromised” his integrity.

Barclays believes if Musk is forced to leave because of the SEC action, it will be weigh on Tesla's stock.

“The SEC civil action may lead to Musk's exit from Tesla (either permanently or temporarily) and the Musk premium in the shares dissipating,” analyst Brian Johnson said in a note to clients Friday. “Tesla shares have ~$130 of Musk premium for future success that might dissipate.”

Tesla's stock closed at $307.52 Thursday.

Johnson reiterated his underweight rating and $210 price target for Tesla shares.

One Wall Street firm is concerned the controversy about the lawsuit will hurt demand for Tesla's cars.

“We see the potential for negative sentiment to impact demand and employee morale,” Morgan Stanley analyst Adam Jonas said in an investor note. “In our view, this is particularly a risk if the situation is not resolved relatively quickly.”

Jonas reiterated his equal-weight rating and $291 price target for Tesla shares.

J.P. Morgan also thinks the news will affect the company's ability to raise financing.

“We are concerned that decreased confidence in Tesla on the part of investors may impact the company's ability to raise capital on amenable terms,” analyst Ryan Brinkman said in a note to clients Friday.

Brinkman reaffirmed his underweight rating and $195 Dec. 2018 price target for the company's shares.

Citigroup also downgraded the stock to a sell rating from neutral.

“There's little question that Mr. Musk's departure would likely cause harm to Tesla's brand, stakeholder confidence and fundraising,” the note said. “If Mr. Musk ends up staying on, the reputational harm from this might still prevent the stock from immediately returning to 'normal.'”

Disclaimer

Lyft unveils second annual diversity report

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New book tells the fascinating story of Shai Agassi and Better Place

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Tesla shares drop as much as 13% after SEC charges CEO Elon Musk with fraud

Musk could still be an important piece of Tesla, he just couldn't run the thing: Stewart
6 Hours Ago | 11:59

Shares of Tesla dropped sharply in after-hours trading Thursday after court documents showed the Securities and Exchange Commission is suing Elon Musk for fraud.

Sources close to the company told CNBC the company was also expecting to be sued, though Tesla was not named as a defendant in the complaint.

Tesla's stock dropped as much as 13 percent, to around $268, down from $307.52 as of the close.

Musk, the company's CEO, tweeted last month he was thinking about taking Tesla private, noting: “Funding secured.”

The Aug. 7 tweet sent Tesla shares flying, and they closed 11 percent higher on the day.

After sending the tweet, Musk claimed he had been in talks with the Saudi Arabian sovereign wealth fund and was confident he'd have the funding to take the company private at $420 a share. Tesla abandoned its plans to go private later in August.

“The SEC is looking at it very seriously. The stock is going to be under pressure while this gets resolved, and obviously these things take time. The SEC obviously has fired the first shot,” said Art Hogan, chief market strategist at B. Riley FBR. “It sounds like the company's first communication was to defend.”

Tesla since Aug. 7

Source: FactSet

In its complaint, the SEC said Musk knew he “had not agreed upon any terms for a going-private transaction with the Fund or any other funding source,” adding Musk had “had no further substantive communications with representatives of the Fund beyond their 30 to 45 minute meeting on July 31.”

Regardless, the stock has been a roller-coaster ride for investors ever since the infamous Aug. 7 tweet. Since popping that day, the stock has dropped 19 percent through Thursday's close.

Colin Rusch, an analyst at Oppenheimer with a buy rating and a $385 price target on Tesla, told CNBC's “Closing Bell” the stock, and the company, can recover from this.

“The potential for this platform is generating an awful lot of cash flow,” Rusch said. If “they implement some fiscal discipline around growth and increment operating margins, we do think there is still an awful lot of capital that is still very bullish on this name and will continue to buy the name even with this sort of overhang.”

— CNBC's
Patti Domm
contributed to this report.

WATCH: Munster thinks there's a 25% chance Musk remains Tesla CEO

I think there's a 25% chance Musk remains Tesla CEO: Munster
6 Hours Ago | 09:06

Tesla’s Elon Musk accused of fraud

The Securities and Exchange Commission has filed a lawsuit accusing Tesla boss Elon Musk of securities fraud. The US financial regulator says Mr Musk’s claims that he had secured funding to take the electric carmaker private were “false and misleading”. It is seeking to bar Mr Musk from acting as an officer or director of… Continue reading Tesla’s Elon Musk accused of fraud

Musk’s fraud charge will be a force for positive change at Tesla, says tech investor Munster

I think there's a 25% chance Musk remains Tesla CEO: Munster
2 Hours Ago | 09:06

The fraud charge for Tesla founder and CEO Elon Musk could spark positive change at the electric car maker, said Gene Munster, managing partner of technology-focused venture capital firm Loup Ventures.

“I think this is actually, strange as it sounds, may be a positive force for some change at the company. We've been advocating that Elon has a different role — stays at Tesla but different visionary role, non investor-related focus. I think there's an opportunity this will pave the way for some of that,” Munster said Thursday on “Closing Bell.”

Musk has been sued by the Securities and Exchange Commission for fraud, according to court documents filed Thursday. Sources close to Tesla told CNBC that the company was also expecting to be sued, though it was not named as a defendant in the complaint.

In August, Musk tweeted that he was considering taking Tesla private, adding “funding secured.” The tweet spurred a scandal-ridden fall for Tesla and sent the stock seesawing for weeks.

“This unjustified action by the SEC leaves me deeply saddened and disappointed. I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way,” Musk said Thursday in a statement.

I'm surprised shareholders are shocked Musk was charged: Citron's Left
2 Hours Ago | 03:31

Munster said there's “greater than 50 percent” chance Musk gets removed as an officer, because the SEC, “they want blood here.” Munster said it is unlikely Musk will be ousted from the company completely — a fear he said is fueling Tesla's sharp after-hours decline.

“Investors are jumping to that conclusion … that will be on investors minds' for a long time. But that is only one of four remedies for being found guilty of securities fraud, and keep in mind, he has not been found guilty,” Munster said.

Although he thinks the charge could push Musk into a position that better suits his talents for “product and vision” at Tesla, he admitted the news “plays into the difficulty that Tesla is having,” and will likely keep the company's stock “range-bound for probably the next three months.”

“The most important part is that he remains an important part of the fabric of that company … and he can do that without having a spot on their board or an investor-facing role,” Munster said.

Colin Rusch, senior analyst at Oppenheimer, agreed that there is a need for additional leadership at Tesla. He compared Tesla to Apple, which saw its stock appreciate “pretty significantly” for several years after CEO Steve Jobs left.

“We wouldn't be surprised to see Musk settle this fairly quickly,” he said on “Closing Bell.” “He probably does want to stay involved in the company in an active way and will try to do that.”

Shares of the automaker fell more than 10 percent in extended trading Thursday.

— CNBC's Sara Salinas contributed reporting.

Tesla Autopilot on Version 9: Mad Max mode, path planning, navigate, and more

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