Tesla stock roars back after Elon's SEC deal

Elon Musk to Resign as Chair of Tesla Board but Remain CEO

Elon Musk told Tesla employees that the company was on the cusp of making money, hours after he and the carmaker reached a settlement with the United States that steps up oversight of the chief executive officer's communications of material information. However, according to the latest reports, the CEO of Tesla, the well-known auto manufacturing company, of course, Elon Musk resigns as chairman of Telsa.

Loup Ventures Managing Partner Gene Munster noted that the SEC settlement is the best outcome possible from Elon Musk's "funding secured" fiasco.

Billionaire businessman Elon Musk has stepped down as the Chairman of Tesla following a tweet where he claimed he has the funding and investor support to buy the publicly-traded company.

Tesla in recent years has become one of the most valuable American vehicle maker, with its stock worth more than $50 billion.

Musk has said the company needs to produce 7,000 cars a week to make money, a target he aimed to reach in the July-September quarter. Tesla shares plummeted 14% on Friday, the biggest drop in nearly five years. Tesla had come under criticism for years prior to Musk's take-private episode for lax governance, though shareholders sided with the board in June by voting against an independent chairman proposal and approving the re-election of three directors.

Furthermore, it adds: "Despite notifying the market in 2013 that it intended to use Musk's Twitter account as a means of announcing material information about Tesla and encouraging investors to review Musk's tweets, Tesla had no disclosure controls or procedures in place to determine whether Musk's tweets contained information required to be disclosed in Tesla's SEC filings". Some analysts had said that Musk's departure would harm Tesla's brand, fundraising abilities and stakeholders' confidence if the company lost its key visionary.

"The total package of remedies and relief announced today are specifically created to address the misconduct at issue by strengthening Tesla's corporate governance and oversight in order to protect investors", said Stephanie Avakian, co-director of the SEC's Enforcement Division.

Tesla shares took a steep dive last Friday, plunging 13.90% amidst news of the SEC's lawsuit against the outspoken CEO.

Musk has courted several controversies in recent times by making a series of unusual public comments or appearances, including an Internet interview in which he appeared to smoke marijuana.

The company has recently been struggling to meet audacious production goals for its Model 3 sedan.

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