Elon Musk is one of the most controversial figures in the world of technology, and one of its facets is the use he gives to his Twitter account, in which he does not control his words.
This is part of an agreement that the businessman has reached with the US Securities and Exchange Commission after being accused of fraud for what he posted on his Twitter account on August 7.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
Musk had tweeted he was considering making Tesla a private company, and although in the end those plans were not carried out, the agency sued the CEO of Tesla for allegedly cheating investors with that tweet.
The agreement reached in less than three days, requires Tesla to pay a fine of 20 million dollars, add two new independent directors to its board, and also hire a lawyer who must monitor the public communications of Musk to ensure that is not giving misleading information.
In its lawsuit, the US Securities and Exchange Commission alleged that Musk made a calculation based on 20% of the “standard premium” on the closing price of the stock that day. In his tweet Elon Musk wrote $420, but the calculations indicated that the price would be $419 per share.
Musk rounded the price to $420 because he had recently learned the meaning of the number in the marijuana culture, and “he thought his girlfriend would find it funny, which is certainly not a good reason to choose a price.”
Elon will continue to be Tesla’s CEO, but he will have to resign as chairman of the board within a maximum of 45 days, and he will not be able to regain that position for at least three years. The 20 million dollars will be distributed among the investors that were affected, under a process approved by the court.