10:27 AM, Oct 17, 2018 — Tesla’s (TSLA) founder and chief executive officer, Elon Musk, will buy $20 million in stock of the electric car company in a sale that’s “separate and apart” from a settlement with regulators that was signed off by a judge this week.
In a filing to the Securities and Exchange Commission n Wednesday, the company said “Elon has notified Tesla that he intends to purchase from Tesla, and Tesla expects that it will issue and sell to Elon, $20 million of Tesla’s common stock during the next open trading window at the then-current market price.”
The same filing outlined the approval on Tuesday by the US District Court for the Southern District of New York of a settlement between Musk, the company and the Securities and Exchange Commission over Musk’s tweets in August that he was considering taking Tesla private, and that funding was secured. The settlement showed that Tesla and Musk will each pay $20 million.
Shares in the car company swung widely in the wake of Musk’s take-private comments. As part of the settlement, Musk will resign as board chairman and be replaced by an independent director. Tesla’s stock was little changed on Wednesday and are down 11% year-to-date.
“In three years, the board will be able to reappoint Elon to resume the role of chairman of the board if such reappointment is approved by a majority vote of stockholders at such time,” Tesla said.
“As part of the settlement, there will be no restriction on Elon’s ability to continue to serve as Tesla’s CEO and there will also be no restriction on Elon’s ability to serve as a director on Tesla’s board,” the company said in the SEC filing.
The district court signed off on the deal even as Musk appeared to mock the SEC just days after agreeing to settle the fraud charges put against him by the regulator, writing on Twitter that “the Shortseller Enrichment Commission is doing incredible work. And the name change is so on point!”
Companies: Tesla, Inc.
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