Tesla's Biggest Dive Since 2013 Sends Musk an Urgent Message
- SEC lawsuit erases $7.3 billion from company’s market cap
- Share plunge puts pressure on embattled CEO to settle case
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Tesla Inc.’s plunging stock price indicates investors want Elon Musk to quickly cut a deal with the Securities and Exchange Commission. The question is whether the notoriously unpredictable chief executive officer will take the hint.
In suing Musk Thursday, the SEC put shareholders’ worst-case scenario on the table: Musk’s potential ouster from Tesla. The regulator had offered a much lighter punishment that would have allowed him to stay on as CEO, while paying between $5 million and $10 million, according to a person with knowledge of the matter. Under the scrapped settlement, Tesla would have also faced a financial penalty, though it was lower than Musk’s, the person said.