Published: Thu, October 11, 2018
Economy | By

Murdoch planning to TAKEOVER Tesla empire following SEC ruling?

Murdoch planning to TAKEOVER Tesla empire following SEC ruling?

The regulator sued Mr Musk last month over allegations that he misled the stock market and harmed investors by tweeting in August that he had "funding secured" to take Tesla private.

The SEC sued Musk on September 27, alleging that a series of "false and misleading" tweets he made in August about potentially taking Tesla private constituted securities fraud.

The younger Murdoch has no experience when it comes to manufacturing and has yet to lead a company that makes any type of vehicle.

There had already been speculation that Murdoch, who has served on Tesla's board as a nonexecutive director since past year, was the leading contender for the chairman position.

In a vote of confidence for Musk, shareholder T. Rowe Price Group Inc said in a regulatory filing on Wednesday that it had raised its stake by almost half to 10.2 per cent at the end of September from just under 7 per cent in June.

While the latter cited a lack of relevant experience and a "troubled history as an executive and director", Glass Lewis warned that Murdoch already served on too many boards.

James Murdoch, whose father is Rupert Murdoch, the billionaire chairman of Fox News, is close to stepping down from his CEO position at 21st Century Fox pending its sale to Disney. The government watchdog had gone after Musk over his stated vow to take the company private.


He returned in 2016 after working for several years at Fox.

"I would still have reservations about the time he would be able to allot to this", Keatinge said, referring to the possibility of Murdoch as Tesla chairman. One of the FT's sources said external candidates were still being considered.

The executive director of CtW Investment Group Dieter Waizenegger argues that it is important to consider multiple candidates because "investors should really be wary about the board making the easy choice here" in opting for Mr Murdoch.

Tesla is under scrutiny for failing to produce its Model 3 sedan quickly enough and in sufficient volume to meet customer demand. "The company needs some added stability at the top to win back investor confidence". Musk initially refused to settle, leading the SEC to double its fine from $10 to $20 million and increase the length of time Musk is barred from serving as Chairman from two to three years.

Tesla has until November 13 to appoint a new chairman of the board as per the agreements made between the company and the US Securities and Exchange Commission.

Tesla shares are trading at $258.25 -$4.55 or -1.73%.

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