Tesla Share Price Improves After Elon Musk Fraud Deal

Tesla Share Price Improves After Elon Musk Fraud Deal

Many, including myself, would argue that it’d been a long time coming, but Elon Musk‘s antics finally went a step too far. As you may have recalled from the news last week, the SEC (security exchange committee) in America officially sued Elon Musk for what they felt was fraud violations due to his now infamous ‘taking Tesla private’ twitter post.

The initial news of this caused a sharp decrease in the share price. Something that could’ve significantly worsened had Elon Musk chosen to fight it. Following a deal reached over the weekend though, things have returned to normal. Well, relatively. He’s had to pay a $20M fine and while he’s still allowed to own a significant portion, he’s got to step down as the chairman for 3 years.

Following the news of the deal though, in a report via SkyNews, Tesla shares have started soaring again. The question is, why?

Three Options

The first option is that investors are pleased that this fraud legal case didn’t gain much traction, it wasn’t dragged out and a deal has been made. A deal which will still keep their clearly charismatic (if eccentric) owner at the company. Albeit, in a role where he will certainly not enjoy as much power as before.

The second option is that this is just a regulation of the price following the sharp dip when the legal case was announced.

The alternative, however, is that the price has jumped because people are glad he’s no longer calling the shots. With him no longer being chairman, a new one will have to be found. One that will almost certainly be a lot less controversial. In regards to that though, we will have to wait and see!

What do you think? – Let us know in the comments!