“On Friday, the New York Times released an article detailing the process with which Tesla (TSLA) rejected the Securities and Exchange Commission’s first settlement offer, causing its stock to plummet 14%, before going back to the SEC and finally agreeing upon a settlement, about 48 hours later,” Quoth the Raven writes for Seeking Alpha. “This story offers small details to the situation that could be of large consequence to Tesla investors… In fact, the Times reported on Friday that the company rejected the SEC settlement at the very last minute because Elon Musk threatened to quit as CEO. He also apparently demanded that the board of directors put out a statement telling the public that they stood behind Musk and his integrity, as well.”

“As most people know, the board of directors is supposed to be protecting the interests of shareholders and governing the company and its officers accordingly,” Raven writes. “In many cases, I have made the argument that it appears that Elon Musk is the one doing the governing and that the board has been beholden to him, instead of the other way around. This report indicates to me that my line of logic may be accurate. For Musk to be able to simply pull the card of ‘I quit’ any time something happens that he doesn’t agree with is not only poor corporate governance, but sets the stage for immense future volatility between Musk and his board, in my opinion.”

“I think Tesla investors can ready themselves for a new period of volatility relating to this going forward. As most people know, the settlement with the SEC stipulates that Tesla must bring on two independent directors. It also stipulates that Musk must step down as board chairman,” Raven writes. “If the company goes out and selects two independent board members who are fully aware of their fiduciary responsibility and the liability of being a board member, and are truly ‘independent,’ things have a chance to get rockier, very quickly.”

Read more in the full article here.

MacDailyNews Take: Musk has always been eccentric and, increasingly, unpredictable and erratic. He’s now ventured into actionable impetuousness. At times, it’s like watching a slow-motion car wreck.

A company in Telsa’s shape has no chance of competing with German and other automakers who are moving strongly into Tesla’s purview, to say nothing of the potential of mighty Apple entering the market.

SEE ALSO:
Elon Musk’s ultimatum to Tesla board: Fight the S.E.C. or I quit – October 4, 2018
Musk ousted as Tesla chairman, fined $40 million in SEC settlement over fraud charges; will remain CEO – September 29, 2018
U.S. SEC charges Tesla CEO Elon Musk with fraud – September 27, 2018
Tesla shares crash after Elon Musk smokes pot on live web show, exhibits other bizarre behavior – September 8, 2016
Apple hired scores of ex-Tesla employees this year, and not just for its car project – August 24, 2018
Tesla sinks on concerns over CEO Elon Musk’s erratic behavior – August 17, 2018
Doug Field, former Tesla engineering chief, returns to Apple – August 10, 2018