Back in 2018, following an onslaught of attacks from short-sellers, Elon Musk had decided to delist Tesla from the New York Stock Exchange and turn it into a private company.
And in August of the same year, Elon Musk wrote on Twitter his now infamous words saying “Am considering taking Tesla private at $420. Funding secured.”
Am considering taking Tesla private at $420. Funding secured.— Elon Musk (@elonmusk) August 7, 2018
Following that, Tesla started preparations to take the company private. At the time of Musk’s tweet, Tesla stock was trading around $320 per share. But, soon after the share price skyrocketed to above $400.
However, ultimately Tesla board members convinced Elon Musk to walk back his decision and Tesla ended up staying a public company. Following this reversal, Tesla’s stock price plummeted, the U.S Securities and Exchange Commission (SEC) started investigating Musk for the “funding secured” part of his tweet, and a class-action lawsuit was filed by investors who claimed Musk’s tweet had caused them financial harm.
The SEC investigation started to fuel rumors that Musk might be forcefully pushed out from his Tesla CEO position. This further harmed the EV maker’s stock price and according to Musk in order to put the entire saga behind him, he reached a settlement with the SEC.
In the settlement, Musk agreed to give up his Tesla chairman position and to have his tweets preapproved by a lawyer. Musk and Tesla also paid $20 million each to the SEC to be dispersed to Tesla investors who bought Tesla stock around Musk’s tweet.
Tesla and Musk paid $40 million to the SEC in 2018. However, more than 3 and a half years after the settlement, the SEC has yet to disperse the funds to Tesla investors.
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In February of this year, Musk's lawyers sued the SEC for having "broken its promises" by dragging its feet on the payout. Following the lawsuit, the SEC finally drew up a plan to distribute the funds and submitted it to U.S. District Court, Southern District of New York.
And today, Judge Alison Nathan finally approved the distribution plan. Meaning, after 3 and a half years, Tesla investors can finally receive what they are owed.
Due to interest, the settlement amount has grown from $40 million to $41.2 million. However, as of now, it’s not exactly clear who is getting how much money. We will be sure to keep you updated as more information comes out. Make sure to visit our site torquenews.com/Tesla regularly for the latest updates.
So what do you think? Excited that the settlement money will finally be dispersed to Tesla investors? Are any of you expecting a payout from the SEC? Let me know your thoughts in the comments below.
Image: Courtesy of Tesla
For more information check out: Tesla Shows an Incredible Video of Giga Berlin's Entire Production Also, see Elon Musk Confirms: Tesla Working On New Manganese Battery Cell, Halfway Between NCM And LFP
Tinsae Aregay has been following Tesla and The evolution of the EV space on a daily basis for several years. He covers everything about Tesla from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at @TinsaeAregay for daily Tesla news.