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Elon Musk is officially stepping down from his position as Chairman of Tesla

Elon Musk is officially stepping down from his position as Chairman of Tesla

It hasn’t been the greatest week for Tesla shareholders and now Elon Musk is stepping down as chairman of the company 

As of today, Elon Musk has agreed to step down as chairman of Tesla and pay a $20 million fine. Don’t worry, Musk will still remain CEO of the company, but this agreement will settle the shareholder fiasco that Tesla recently went through. 

 Photo courtesy of Stephen Lam/Reuters

Photo courtesy of Stephen Lam/Reuters

The Backstory

On August 7, Musk tweeted that he was “considering taking Tesla private at $420. Funding secured.” The reason this tweet backfired is that it would have been the largest corporate buyout ever - except that it was a false statement. Musk had only discussed the idea and the price he had discussed with an investor was $419, not $420. Rumor has it that Musk rounded the number up because of its significance in marijuana culture. Needless to say, Tesla’s stock took a serious hit earlier this week because of all the drama. 

What Now?

Musk has 45 days to officially resign from his role as Chairman of the Tesla board and pay the $20 million penalty. Additionally, Tesla will pay a separate $20 million penalty. Tesla is being fined because they failed to “require disclosure controls and procedures relating to Musk’s tweets.”

Musk’s response to the accusations? “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.”

We at The Sitch think that Tesla is a great company and we hope the best for Musk as he steps down as chairman, but are also glad that he’ll remain CEO. Let us know your thoughts in the comments section below and be sure to subscribe to The Sitch for more Tesla news and other entertaining reads. 

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