Elon Musk Reportedly Says Tesla Is Close to Achieving Profitability

Andrew Cummings
October 1, 2018

Shares of Tesla jumped 18% on Monday as signs it had met targets for quarterly production numbers added to relief at Chief Executive Elon Musk's settling a lawsuit with regulators that could have forced him out.

The message from the Tesla boss could bring some cheer to the workers as the last few weeks had been quite tumultuous for Musk who had on Saturday agreed to step down as chairman of the company for three years and pay a $20 million fine in a deal with the U.S. stock market regulatory authority, Securities and Exchange Commission (SEC), to resolve securities fraud charges.

This is only the midpoint of his Musk-sational 2018 narrative.

Lawyers say the settlement and size of the fine may give more ammunition to short-sellers pursuing separate cases against Mr Musk for manipulating the company's shares as well as to a probe by the Justice Department.


Tesla's most active high-yield bond issue traded up 2.5 cents to 86.75 cents on the USA dollar early Monday, the biggest gain since August 2.

Musk, a co-founder of Tesla, is the company's largest stockholder, owning approximately 22 per cent of its outstanding shares. This SEC run-in may prove the white knight to a Tesla in distress, shackled to the whims of a stretched-too-thin executive. Tesla is due to appoint two new independent directors, with the board expected to oversee Musk's communications with investors.

Last week, the government charged Musk with making "false and misleading statements" to investors on his Twitter account when he said he had secured funding to take the company private. With products like the Model S, Model X and, even with its production woes, the Model 3, it's easy to see why.

Now investors want to see if Tesla met its production and deliveries goals.


In emails leaked to CNBC, Musk hinted that Tesla was "very close" to being profitable and told staff to "ignore the distractions".

This weekend's legal drama came as Tesla was scrambling to wrap up its pivotal third quarter. He'll also not be eligible to be elected into the Chairman position for three years, Time reports. In addition to this punishment, Elon Musk and Tesla are required to pay a fine of $20 million each.

"The resolution is meant to prevent further market disruption and harm to Tesla's shareholders", Peikin added. Monday's gains erased Friday's 14 percent plunge after the SEC filed its lawsuit late on Thursday.


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