Tesla shares drop as analysts divided on Musk’s future with the company

Musk's troubles with the SEC stem from an August 7 tweet in which he said he was considering taking Tesla private for $420 per share - a corporate buyout the SEC says he had no way of financing.

Shares of Tesla Inc plunged up to 13 percent on Friday as investors anxious about the future of Chairman and Chief Executive Elon Musk at the electric carmaker after USA securities regulators accused him of fraud.

Musk denied, stating that it was just a beautification technique to make Tesla's 20 percent share increase look a bit more appealing.

Tesla without Elon Musk at the wheel?

Tesla has always weathered these storms, and its continued ability to stay afloat amid these challenges is enough to convince many that the electric auto company will be around for a while yet. Thursday, the SEC filed suit against Musk after the CEO reportedly declined to settle with the agency outside of the courtroom. "Integrity is the most important value in my life and the facts will show I never compromised this in any way", he said.

At least five research firms said Musk might have to resign following the SEC lawsuit.

According to the complaint, Musk met with representatives of a sovereign investment fund for 30 to 45 minutes on July 31 at Tesla's Fremont, California, factory.

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"In order for Tesla to raise money I think investors will want Musk to stay involved but have more controls in place". But Musk also could agree to step down as CEO and instead take another title, such as chief production officer.

The complaint alleges that Musk's tweet harmed investors who bought Tesla stock after the tweet but before accurate information about the funding was made public.

Tesla shares were down down less than 1% this year through Thursday.

'We are concerned that decreased confidence in Tesla on the part of investors may impact the company's ability to raise capital on amenable terms, ' Brinkman said.

Spiegel also echoed the concerns of corporate governance experts who have lambasted Tesla's board for being too beholden to a CEO that they are supposed to oversee.

An unnamed Wall Street analyst emailed Tesla's head of investor relations following the blog post noting that it didn't address Musk's assertion in his tweet that funding had already been secured for the buyout.

In a joint statement, Tesla and its board reacted late Thursday, saying they "are fully confident in Elon, his integrity, and his leadership of the company, which has resulted in the most successful USA auto company in over a century", as reported by The Washington Post.

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