Fears about Musk's future sink Tesla shares

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Bernstein analyst Toni Sacconaghi commented on what this could mean for Tesla in the future saying: "In the absence of a settlement, the mere possibility that Musk could be removed as CEO (or entirely from Telsa), is likely to cast a shadow on the stock, and make it extremely hard for the company to raise capital (either private or public)".

Musk's out-of-the-blue move apparently blindsided Tesla's chief financial officer, Deepak Ahuja, forcing him to scramble to minimize the havoc that he immediately recognized had been wrought by his CEO. He specifically said he would consider doing so at $420, adding that funding had already been secured.

According to the SEC filings, Musk said that calculation resulted in a price of $419, which he rounded up to $420 "because he had recently learned about the number's significance in marijuana culture and thought his girlfriend 'would find it amusing, which admittedly is not a great reason to pick a price'".

And according to the court filings, they were partially made with Musk's then-girlfriend Grimes in mind.

"We believe it is important for the confidence of investors that Mr. Musk remain involved", said a note from JPMorgan Chase.

Musk, 47, is the public face of Tesla, and has driven it to the verge of profitability with a costly ramp-up of production of its Model 3 sedan over the past year.

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"When he made these statements, Musk knew that he had never discussed a going-private transaction at $420 per share with any potential funding source, had done nothing to investigate whether it would be possible for all current investors to remain with Tesla as a private company via a 'special objective fund, ' and had not confirmed support of Tesla's investors for a potential going-private transaction".

The SEC also alleged Musk's tweets caused market chaos and investor harm. That day, Tesla shares closed up 11 per cent from the previous day.

"The point is, there's always this carrot that Elon Musk is dangling out in the future of something that is going to take this company to nirvana, if you will, and he consistently misses it", he said.

The board too issued a statement in support of Musk, saying it was "fully confident in Elon, his integrity and his leadership of the company".

Musk has uncharacteristically been quiet on Twitter since his last tweet on Wednesday. In other words, Musk wouldn't take the settlement because that would imply that he did something wrong, and he doesn't think he did.