Elon Musk steps down as Tesla chairman

After Elon Musk tweeted about taking Tesla private, the Securities and Exchange Commission sued him for "false and misleading" statements to investors. Now he's stepping down as chairman and paying a $20 million fine.

Posted: Dec 11, 2018 7:15 AM
Updated: Dec 11, 2018 7:17 AM

Elon Musk was at one point counting on Saudi money to take Tesla private. Now he says he wouldn't accept an investment from the country's sovereign wealth fund because of the murder of journalist Jamal Khashoggi.

In an interview with Recode, Musk said Khashoggi's killing inside the Saudi consulate in Instanbul on Oct. 2 was "really bad." Asked whether he would take money from the government-controlled investment fund now, he replied "I think we probably would not."

Musk had met with officials from the Saudi fund on July 31. The fund already had purchased nearly 5% of Tesla shares on the open market, and fund officials urged Musk to accept an additional investment to take the company private.

Musk said in a later blog post that he left that meeting "with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving." A week later he shook Wall Street by announcing in a tweet plans to take Tesla private. He dropped those plans within a few weeks.

Musk told Recode the Saudis may have sold their stake in the company since those discussions. Investors only have to disclose the extent of their holdings if they own 5% or more of the stock. He also said he still sees advantages to taking the company private.

"I think we could execute better if we were private," he said, saying that short-sellers who bet on a decline in the price of the stock do damage to the Tesla brand because the stock is public.

"Also being public, particularly when everyone at the company's a shareholder, causes a lot of distraction when the share price moves around a lot," he said. "The stock goes down, people are sad and feel undercompensated. And then when the stock goes up, people are exuberant, overly exuberant."

But he said that Tesla does not need to go private and that trying to do so again "would result in some short-term drama."

Musk and Tesla were both hit with $20 million fines by the Securities and Exchange Commission following Musk's tweet in which he said he had "funding secured" to go private. Musk also agreed to give up his chairman role at the company and to submit to more oversight of his tweets.

But he told Recode he intends to keep tweeting in much the same way, being careful only to avoid tweets that would move Tesla stock during the trading day.

"I tweet interesting things pretty much as they come to me, and probably with not much of a filter," he said. "I spend a lot less time on Twitter than people probably think. It's like maybe 10-15 minutes [a day]."

Musk also said he's spending less time at Tesla than earlier this summer when he was spending as much as 120 hours a week at work, with little time left for sleep.

"You're gonna go a little bonkers if you work 120 hours a week," he said. "Now we're down to 80 or 90. It's pretty manageable. 80 is pretty sustainable."

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