Tesla is 'very close' to profitability, Musk says in staff email

Tesla is 'very close' to profitability, Musk says in staff email

Tesla's shares plummeted around 14 percent on Friday over concerns about the company's future after the announcement of the fraud charges against Musk, which were a fresh blow to the mercurial Silicon Valley entrepreneur and his company. The SEC's complaint alleged that Musk had made "false and misleading" statements, with Tesla's share price having risen on the back of Musk's tweet.

An army of Tesla-owning volunteers swooped in over the weekend to help deliver cars to new buyers while Musk cheered on his employees, telling them in emails to "ignore all distractions" and that they were on the cusp of "an epic victory beyond all expectations".

The charges come after Musk claimed in August via a series of tweets that he was planning to take the electric auto maker private, and implied that such a move was imminent with "funding secured".

At the same time, Tesla has also settled new charges of "failing to have required disclosure controls and procedures relating to Musk's tweets", and will also pay a penalty of $20m. NY time, clawing back Friday's 14 percent plunge.

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 U.S. that steps up oversight of the chief executive officer's communications of material information. Tesla's free cash flow in the second quarter totaled negative $739.5 million, bringing the company to a net loss of $717.5 million, the company reported in August.

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In the Chicago suburb of Highland Park, more than 75 people crammed into Tesla's service center and another 50 or so waited outside.

Musk said he later decided against the plan. The $40 million in fines will be distributed to investors who claim to have been financially harmed by Musk's premature communications.

Under the agreement - which Clayton said was "in the best interests of our markets and our investors, including the shareholders of Tesla" - Musk will be ineligible to serve as chairman of the board for a period of three years and will be replaced by an "independent chairman", according to the SEC.

"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.

But its shares have been hit hard since the SEC filed the lawsuit.

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