As of September 29, 2018, Elon Musk is no longer the chairman of Tesla. With many back and forths between lawyers, investors, the people at the Securities and Exchange Commissions, and with Elon Musk himself, there came a conclusion to the investigation of Tesla going private: Mr. Musk will step down as chairman for 3 years with a 40 million dollar fine split between him and Tesla.
This whole incident began on August 7, 2018, when a single tweet, covered on our blog before, was posted by Musk saying "funding secured" referencing the 420 dollars for each shareholder for taking Tesla private. On top of this, Tesla made a blog post that publicized the email in which Musk described the reasoning for trying to make Tesla private. The issue is not so much making Tesla private but Musk's own decision to manipulate it's investors so that going private will work.
This still means the title of CEO will be Musk's but without the control of the board of directors, he won't have full control of his own company. On top of this, the SEC is forcing reforms among Tesla's board creating heavy surveillance on Musk's communications between investors to lower market disruptions and stop any more harm to Tesla's shareholders.
With the dispute settled, here's the underlying question: Was it right for Mr. Musk to try and manipulate Tesla's investors? But also, was it right of the government to interfere with Musk over a single tweet without the evidence of a monopoly? Should Twitter now be the greatest communication phenomenon that the government should act upon?
Sources:
https://www.nytimes.com/2018/08/25/business/elon-musk-tesla-private.html?action=click&module=RelatedCoverage&pgtype=Article®ion=Footer
https://www.sec.gov/news/press-release/2018-226
https://www.nytimes.com/2018/09/29/business/tesla-musk-sec-settlement.html
I think since the internet is such a free place for people to say whatever they want, the government probably should've investigated more before taking action over a few tweets. However, if Musk's intentions were not as he says, he should still be aware of the public spotlight that he is under and should be more careful about what he chooses to post on a public forum. Not everyone means what they say online and taking everything too seriously could be a great waste of time and resources for the government
ReplyDeleteNowadays, social media has so much power in politics. It's kind of strange how the SEC is using a tweet as the start of their investigation, but I suppose it's going to be something that we have to get used to. This seems weird because we've always been taught that social media is not a reliable source of information, yet here the SEC is using information from social media to create a case.
ReplyDeleteNo, I don't think it was right for Elon Musk to try and manipulate Tesla's investors. The government can anticipate for a monopoly and stop it in advance, but without proof they should not have interfered. Twitter shouldn't be the greatest communication phenomenon that the government should act upon but it is easy and convenient for the government to do so.
ReplyDeleteI don't think that either Musk or the government was in the right in this situation, however Musk should be aware of his impact on social media and be willing to take responsibility for his actions on social media. It will be interesting (and daunting) to see the extent to which social media plays a role in the government's ability to do things like build a case on someone.
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