IT ALL STARTED WITH THE TWEETS
AND ENDED WITH SOMEWHAT OF A
WHIMPER.
PERHAPS THAT WILL BE THE
FUTURE TITLE OF ELON MUSK
BEST-SELLING MEMOIR AFTER HE
DECLARED HIS INTENTION TO TAKE
THE COMPANY PRIVATE AT $420.
SHARE BACK ON AUGUST 7 AND
TOOK HIS STOCK DOWN WITH IT.
IT FOLLOWED WITH A FRAUD
CHARGE BY THE SEC.
FAST FORWARD TO RIGHT NOW COME
THE STOCK IS UP NEARLY 17%
TODAY, THE ELECTRIC CART
VISIONARY STEPPING DOWN AS
TESLA CHAIRMAN.
KEEPS THE CEO JOB, HE SETTLES
WITH THE SEC OVER FRAUD
CHARGES BUT WHILE THE FORMER
CHAIRMAN GEARS UP TO PAY A
$20 MILLION FINE, KIND OF TINY
SINCE HE'S WORTH BILLIONS,
KEEP IN MIND AT THIS HOUR, THE
REMOVAL OF CHAIRMAN IS STILL
SUBJECT TO COURT APPROVAL SO
IT HASN'T TECHNICALLY OCCURRED
YET.
WHILE YOU'RE ALL ON YOUR SMART
PHONES TROLLING THE TWITTER
FEEDS OVER THE WEEKEND, OUR
NEXT GUEST WAS ALREADY AHEAD
OF THE CURVE AND THE FIRST TO
BREAK THE STORY.
YOU PROBABLY READ IT, JOINING
US LIVE THE AUTOMOTIVE TECH
GREW TIM HIGGINS.
START OFF, I USUALLY LIKE TO
GO FORWARD BUT I WANT TO HEAR
SOME THE BACK STORY.
I LOOK UP AND I SAID OH MY
GOODNESS HE SETTLED.
HERE HE SAID HE WOULD NOT
SETTLE AND THEN IT LOOKED LIKE
HE SETTLED.
GIVE US A WINDOW INTO THOSE
LAST-MINUTE NEGOTIATIONS
BETWEEN HIS LAWYER AND THE SEC
AND WHAT YOU'VE BEEN ABLE TO
COBBLE TOGETHER.
>> REALLY SURPRISING.
FRIDAY IT LOOKED LIKE HE WAS
GEARING UP FOR A BIG FIGHT.
HE HIRED A NEW LAWYER AND
PEOPLE I TALKED TO WHO WERE
FAMILIAR WITH THIS WERE REALLY
SAYING HE THOUGHT HE COULD
BEAT THIS IN A COURT OF LAW.
YOU TURN AROUND ON SATURDAY
AND BOOM YOU GOT A DEAL.
WE REPORTED HIS LAWYERS
BASICALLY COME AFTER THEY
REJECTED THAT INITIAL DEAL
THURSDAY, THEY STARTED TO TALK
WITH THE SEC, TRIED TO BRING
HIM BACK TO THE TABLE, ONE OF
THE PEOPLE I TALKED TO OR WAS
CLOSE TO THE SITUATION SAID HE
REALIZED THAT SETTLING WAS
JUST CAN BE BEST FOR THE
COMPANY, BEST FOR SHAREHOLDERS
INVESTOR HIMSELF AND HENCE WE
GOT THAT SURPRISE DEAL
SATURDAY.
>> I CAN'T BELIEVE HE DIDN'T
SEE THAT RIGHT OFF THE BAT.
THEY WERE GIVING HIM A PRETTY
SWEET OFFER.
I SUPPOSE HE DIDN'T WANT TO
LOSE CONTROL, BUT IN THE END,
MOST COMPANIES ARE MOVING
TOWARD SPLITTING UP THE
CHAIRMAN AND CEO JOBS.
VERY FEW, J.P. MORGAN WENT
JAMIE DONOVAN WHEN
JAMIE DONOVAN WANN
THROUGH THIS BATTLE ALTHOUGH
JAMIE DONOVAN WANT TO
KEEP THE CHAIRMAN AND CEO AS
THE SAME PERSON.
WHO ARE YOU HEARING?
MIGHT IT BE HIS BOSS?
WHO IS THE BOARD TALKING ABOUT
AS A POTENTIAL PERSON.
>> THAT'S THE THING.
INVESTORS WERE ASKED ON THIS
QUESTION EARLIER THIS YEAR END
THEY REJECTED THE IDEA OF
SPLITTING IT.
THEY KINDA LIKE THE IDEA OF
THE TWO IN ONE KIND OF
APPROACH, BUT NEVERTHELESS
HERE'S THE DEAL, INVESTORS
THAT I'M TALKING TO NOW ARE
HOPING THAT THE BOARD WILL GO
TO AN OUTSIDE PERSON AND BRING
AN OUTSIDE CHAIRMAN TO SEND A
MESSAGE THAT THIS IS A NEW WAY
OF DOING THINGS AND NEW
OVERSIGHT.
>> ANY OUTSIDE PERSON?
THIS PERSON NEEDS A LOGISTICS
IN ASSEMBLY-LINE EXPERTISE.
SOMEONE WHO HAS EITHER WORKED
IN THE AUTO INDUSTRY OR, ALAN
MULLALLY FOR BOEING AND RAN
FOR IT IS ONE OF THOSE PERFECT
CANDIDATES.
I DON'T KNOW IF YOU WANT TO
GET BACK IN THE GAME BUT
SOMEONE WHO UNDERSTANDS WHAT
IT MEANS TO HIT TARGETS ON
TIME AND TO TURN THINGS
PROFITABLE.
>> EXACTLY.
MANUFACTURING, AUTO
MANUFACTURING, ANOTHER THING
THEY NEED IS EXPERTISE IN
HUMAN RESOURCE MANAGEMENT.
THERE'S BEEN A LOT OF ISSUES
IN THE LAST YEAR MANAGING
LARGE PEOPLE.
THIS IS A TIME WHEN THE
COMPANY IS GOING FROM BEING A
STARTUP TO A REAL COMPANY AND
YOU CVS TENSIONS IN SILICON
VALLEY COMPANIES WHERE THERE
IS GROWING PAINS AND IT'S TIME
TO BRING IN SOMEONE WHO CAN
HELP ELON DEVELOP INTO THAT
BIG COMPANY LEADER.
>> YOU THINK IS TWEETS WILL BE
CHECKED BEFORE THEY GO OUT?
WILL THAT BE A NEW RULE OR IS
THIS BOARD STILL ENAMORED WITH
ELON MUSK AND WILL LET HIM DO
WHAT HE WANTS TO DO?
THERE HAVE BEEN SOME CRIES
ABOUT THE BOARD SAYING THEY
HAVE BEEN DERELICT IN THEIR
DUTIES OF AT LEAST PUTTING A
LID ON SOME OF HIS URGES TO DO
THINGS THAT MIGHT NOT BE.
[INAUDIBLE]
>> THAT'S BEEN A CHALLENGE FOR
THE BOARD.
A LOT OF THEM HAVE BEEN
LONGTIME ELON BACK, INCLUDING
HIS BROTHER AND HIS LONG-TERM
INVESTORS, BUT PART OF THE
SETTLEMENT SAYS.
[INAUDIBLE]
HIS COMMUNICATION ON ANYTHING
THAT MIGHT BE MATERIAL.
HE IS GOING TO LEARN WHAT IT'S
LIKE TO HAVE AN EDITOR AND THE
JOYS OF GOING THROUGH THE
EDITING PROCESS, APPARENTLY.
>> THERE'S A BIG $OVER THE
COMPANY'S HEAD, COME MARCH, WE
KNOW THERE IS ABOUT A
$920 MILLION QUARTER-POINT
CONVERTIBLE NOTE THAT THEY
HAVE TO COME DUE ON AND THEY
NEED THAT IN LIQUID CASH.
DO THEY HAVE IT, WILL THEY HIT
THAT TARGET, I NEED YOU TO
PREDICT.
>> THAT IS A KEY ISSUE HERE,
IF THEIR STOCK IS CREATING AT
A CERTAIN RATE THEY CAN
CONVERT THAT BUT RIGHT NOW
IT'S NOT THERE.
EXACTLY.
TODAY AND TOMORROW AND THE
NEXT DAY WE WILL SEE THE
PRODUCTION RESULTS FOR THE
THIRD QUARTER, THIS IS A KEY
FIGURE, ELON MUSK HAS PROMISED
HE CAN KEEP THE RATE OF
PRODUCTION AT A STEADY CLIP
AND HE CAN START GENERATING
CASH AND TURN A PROFIT THIS
QUARTER AND IN THE FOURTH
QUARTER, THOSE ARE THE SORTS
OF THINGS HE NEEDS TO DO IN
ORDER TO PAY OFF THAT NOTE AND
ANALYST SAY HE'S GOING TO NEED
TO TAKE OUT MORE MONEY, HE IS
ADAMANT IN SAYING HE DOESN'T
NEED TO DO THAT AND HE WANTS
TO PAY DOWN IS THAT WITH THE