Tesla shares spike on SEC truce, strong Model 3 report

Tesla shares spike on SEC truce, strong Model 3 report

Over the weekend, the US Securities and Exchange Commission (SEC) fined Tesla CEO Elon Musk $40 million split between both himself and the company, based on allegations of fraud causing significant disruption in the stock market.

But several experienced litigators said Monday that, while the DOJ probe is separate, the SEC's settlement could mark the end of official action against Tesla and Musk. "Funding secured." Later on, the SEC ruled that Musk never went through with his declaration and deal between the company and the Saudi sovereign wealth fund set to foot the bill on the buyout.

Besides a new chairman, Tesla was also ordered to appoint two new, independent members to its board.

The next challenge for Musk is proving he has the business savvy to steer Tesla into the promised land of profits. The SEC claimed that Musk knew the funding was not secured.

Tesla Inc (TSLA.O) announced record quarterly vehicle production numbers on Tuesday but warned of major problems with selling cars in China due to new tariffs that would force it to accelerate investment in its factory in Shanghai.

Gene Munster, venture capitalist at Loup Ventures, said Gore would be able to use the role to get Musk, who is still CEO of Tesla, in line.

The deal, which still has to be approved in federal court, calls for Musk to step down from his post as chairman within 45 days.

Tesla's own ability to further accelerate that transition will be tested in coming months by the success of the company's Tesla 3 deliveries this last quarter and the current one just started.

Right now, Tesla stock has a Hold analyst consensus rating with only 7 recent Buy ratings. Andrew Doane, who has a Model S sedan, Model X crossover and Model 3 auto and is president of the Tesla Owners Club of the Mid-Atlantic region, mustered club members to pull shifts at delivery hubs in Virginia and Maryland, and worked one himself. The SEC also said that Tesla had not put any procedures in place to determine that Musk's tweets about the company were accurate or complete. When confronted by customers waiting for vehicles for which they've put down a payment, Musk has said Tesla is encountering difficulties delivering cars to customers due to a shortage of car-hauling trucks, but experts say no such shortage exists and that other automakers are shipping their cars around the U.S. just fine.

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