The Most Expensive Tweet in History

Elon Musk forced to step down from Tesla and pay $20 million fine.

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As of October 1st, The US Securities and Exchange Commission (SEC) has reached a settlement with Elon Musk which will see him step down as chairman of the company he founded, Tesla, and includes a $40 million fine for him and his company.

The value of Elon Musk’s Tesla holdings slid by $1.44 billion on Friday, a day after the SEC charged him with making “false and misleading statements”   in a tweet about having funding secured to take the electric-car company private.

The tweet in question came in early August and stated: “Am considering taking Tesla Private at $420. Funding secured.” Soon after, Tesla stock rose to a record high of $387 per share.

The stock has since plummeted in wake of  investigations launched about possible wrongdoing by the company and Musk himself, first by the SEC and now by the Justice Department. This is because his tweet could be regarded as fraud potentially made to misled investors.

Musk had not discussed the decision to delist with his board members. He came to the figure of $420 a share through a misunderstanding on how to calculate a firms “standard premium” and in reference to the number’s relevance in cannabis culture.

Tesla itself is also under investigation because statements by its CEO can be considered the official word of the company.

Musk’s follow-up announcement that he wouldn’t be taking Tesla private after all has also seemed to hurt the stock.

At its low point on September 11th, Tesla shares were selling at $275 — down almost 30% from its recent high.

Despite calling the suit “unjustified”, Musk and Tesla reached a settlement less than a week after the suit was filed. The agreement, which is still subject to approval by a court, demands Musk step down from his position as chairman within 45 days for at least three years and pay a $20 million fine. Tesla, along with also paying a $20 million fine, will be hiring two new, independent directors to the board and will start monitoring Musk’s public communications more closely.

Subsequently, Elon Musk’s net worth was down $370 million and has continued to plummet.