Everyone is aware of what’s happening with Tesla (NASDAQ: TSLA) or particularly, Elon Musk. He has been sued by the Securities and Exchange Commission or SEC on the grounds that he has misled the investors by announcing on the social networking site that he is taking Tesla private and funding for the same has been secured. Elon Musk reported that a verbal communication had taken place with the sovereign wealth fund of the Saudi Arabia regarding the financing so that the process of taking the company private gets executed. However, the SEC found that these are misleading statements. According to the regulator, that there was no discussion even about the fundamental terms for the transaction between the billionaire and the fund.
As per the settlement which has been arrived at with the SEC, Mr. Musk needs to pay $20 million as a fine and needs to step aside from the designation of the chairman of Tesla. A hard but true fact. Musk would not be acting as the Tesla’s chairman for the period of three years. Apart from this, the car maker would also be appointing two independent directors and will also adopt necessary steps regarding the communication of Elon Musk with those of the investors. The company would also be coming up with the permanent committee which will be formed of the independent directors so that potential conflict of interests, as well as disclosures, can be commanded.
The market participants were wondering who would be taking the position as a chairman. However, it seems like the investors would now see a new face. James Murdoch is expected to be the next chairman of Tesla. He is presently the chief executive officer or CEO of 21st Century Fox apart from a board member of Tesla. Mr. Musk seems to be unhappy with this decision. Though, he did not elaborate much about the expected new appointment. As per the SEC, the company needs to bring an independent chairman, and this has to be done by mid-November. It seems like Mr. Murdoch would be willing to join the company as the Chairman. After the sale of Sky, which is a satellite TV operator, to Comcast, Mr. Murdoch even stepped aside from the position of Sky’s chairman.
It is worth mentioning that Mr. Murdoch got recently targeted by the number of proxy adviser groups. They were voting against him and Murdoch was worried about his designation as an independent director on the board of the company. Therefore, considering him as the chairman of Tesla could somewhat raise some questions in the mind of the market players. Mr. Murdoch handled some criticism because the critics were of the view that he does not have relevant experience.
The proxy advisers named CTW Investment Group as well as Glass Lewis pressured the shareholders that they need to vote against Murdoch.
On October 10, 2018, Tesla ended the session at $256.88 which implies the fall of $5.92 or 2.25%. However, the analysts have given the one-year price of $325 which implies an increase of 26.5% from the current price levels.
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