Tesla shares bounce back on SEC deal – The Wall Street Journal

DUBLIN – Tesla investors seem very relieved to hear that CEO Elon Musk will remain at the helm. Tesla is trading back around the $300 mark, reflecting both relief that Musk will stay on and anticipation that Tesla will report a profit for the third quarter. Musk reportedly sent an email to employees stating that Tesla is "very close" to making a profit, which is great news for shareholders, who have waited a long time for the automaker to get into the green. All eyes will be on the company's third quarter numbers, due to be released early next month. Tesla must show improved production numbers – particularly of the Model 3 – and ideally should show it is capable of continuously producing at least 5,000 Model 3s a week (rather than showing short bursts of high production volumes followed by slowdowns). Investors will also be looking for signs that Tesla will need to raise fresh capital. Musk says that the company won't, but rumours of Tesla asking for cash back from suppliers have been swirling. Tesla has some big bills coming due soon – it has a $230 million convertible bond due in November (unless the share price hits $560.64) and a $920 million convertible bond due in March next year (unless the share price hits $359.87). With just over $2 billion cash on hand, it looks little tight. – Felicity Duncan.Tesla Shares Bounce Back After Friday Decline.By Allison Prang.(The Wall Street Journal) Tesla Inc. shares soared Monday after Elon Musk reversed course and settled with U.S. securities regulators over the weekend, a surprising decision that put to rest the threat of his removal from a company inseparable from his name..___STEADY_PAYWALL___.As news of the settlement unfolded over the weekend, Mr Musk also sought to rally employees in an email that stressed the electric-car maker is "very close to achieving profitability and proving the naysayers wrong." He also wrote "but, to be certain, we must execute really well tomorrow (Sunday). If we go all out tomorrow, we will achieve an epic victory beyond all expectations," according to a copy of the email disclosed in a securities filing Monday..The stock surged 15% in trading to $304.87, bouncing back from a 14% wipeout Friday after Mr Musk was charged by the Securities and Exchange Commission over his Aug. 7 tweets suggesting he had secured funding to possibly take Tesla private. The regulator sued Mr Musk, alleging that he misled investors..The settlement, a stunning reversal after it appeared Mr Musk would dig in to fight the SEC, forces him to step down as chairman for three years. The company is also expected to add two new independent directors to its board. That search is already under way, The Wall Street Journal has reported..But as part of the deal, Mr Musk, who is considered the creative engine of Tesla, gets to remain chief executive and stay on the board—positions that will allow him to continue wielding considerable influence over the company's direction..Mr Musk and Tesla each agreed to pay a fine of $20 million..The SEC also in the settlement called for Mr Musk to submit to greater governance by Tesla over his communications..Mr Musk's unorthodox tweeting didn't stop, however. Early Monday morning, Mr Musk posted a provocative tweet with the name of rap group Naughty by Nature and a YouTube link to "O.P.P.," an early 1990s song that jokes about sexual infidelity. The tweet's connection to Tesla's business was unclear. Some people replying to the tweet mused "O.P.P." was a reference to operating profit..Tesla didn't immediately respond to a request for comment..—Tim Higgins and Bowdeya Tweh contributed to this article..Write to Allison Prang at allison.prang@wsj.com

Tesla shares bounce back on SEC deal – The Wall Street Journal

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