Tesla’s share price jumped today as dramatically as it fell on Friday, thanks largely to this weekend’s settlement of the Securities and Exchange Commission’s complaints against the company and its CEO, Elon Musk.
After falling 14 percent on Friday, the stock rose 17 percent today, leaving the closely watched price at $310.70 at the close. That’s above the level it held during Thursday’s trading hours, just before the SEC announced that it was charging Musk with securities fraud.
The case focused on Musk’s claims in August that funding had been secured for a plan to buy out Tesla’s publicly traded shares at a price of $420 and take the company private.
Tesla’s stock value ballooned when Musk tweeted about the idea, but then deflated when the plan fizzled out. The SEC alleged that Musk knew the plan was built on a shaky foundation when he proposed it.
This weekend’s settlement made clear that Musk was neither accepting guilt nor denying the SEC’s allegations. The SEC also filed papers that charged Tesla with failing to exercise proper oversight over Musk’s actions and laid out a separate settlement of those charges.
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. He’d be barred from taking back the chairmanship for three years, but he can continue to serve as Tesla’s CEO. (Update for 10:55 a.m. PT Oct. 18: U.S. District Judge Alison Nathan approved the deal in Manhattan on Oct. 16.)
Musk and Tesla each agreed to pay a $20 million fine. In addition, Tesla agreed to appoint two more independent directors to its board, and exercise more control over Musk’s statements on social media as well as via more traditional channels of corporate information.
Today’s sharp upturn in Tesla’s share price served as a signal from investors that the settlement didn’t put too heavy of a burden on the company’s operations.
Now attention is likely to shift to the figures for production and delivery of Tesla’s electric cars, and particularly its Model 3 midsize sedan. The company and its fans made a strong push to get the cars to purchasers and prove that the difficult phase Musk called “production hell” was coming to an end.
Update for 11:30 a.m. PT Oct. 2: Tesla said it produced an unprecedented 80,142 vehicles during the year’s third quarter, which was 50 percent higher than the previous quarter’s figure. That production figure includes 53,239 Model 3 cars. More than 5,300 Model 3’s were produced during the last week of the quarter, Tesla said.
Deliveries amounted to 83,500 vehicles — including 55,840 Model 3, 14,470 Model S and 13,190 Model X cars.
“To put this in perspective, in just Q3, we delivered more than 80 percent of the vehicles that we delivered in all of 2017, and we delivered about twice as many Model 3s as we did in all previous quarters combined,” Tesla said. “Our Q3 Model 3 deliveries were limited to higher-priced variants, cash/loan transactions, and North American customers only. There remain significant opportunities to grow the addressable market for Model 3 by introducing leasing, standard battery and other lower-priced variants of the car, and by starting international deliveries.”
Even though Tesla said it hit its production goals for the quarter, its share price dipped on Oct. 2 after Oct. 1’s strong rally.