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What would happen to Tesla without Elon Musk at the helm?

What would happen to Tesla without Elon Musk at the helm?”

Musk will have to explain to a court why he announced on social media that he had investors who would take Tesla private at a share price of $420. "As a result of Musk's false and misleading statements and material omissions, investors who purchased Tesla stock in the period after the false and misleading statements but before accurate information was made known to the market were harmed", said the suit, which was filed Thursday. They are also seeking to prohibit him from heading any other publicly traded firm in the future.

It says Musk failed to communicate with members of the Saudi Sovereign Wealth fund, which had recently invested in Tesla and was touted as a potential source of funds to go private, and had likewise not discussed the proposal with any funding source or existing investors before sending the "funding secured" tweet and several follow-ups on August 7.

Tesla might be able to thrive without Musk if it could replace him with a more experienced automotive or technology veteran who has been at the helm of a profitable company, said Karl Brauer, executive publisher of Kelley Blue Book.

This unjustified action by the SEC leaves me deeply saddened and disappointed.

"His ego is so clearly tied to the company, so what would be best for Tesla's investors would be for him to realize the company is more important than his ego", Munster said.

Aside from the drama surrounding Musk's tweet saying Tesla may go private - and his decision less than three weeks later to stay public - the company has been grappling with the departure of several top executives, most recently its vice presidents of global supply chain management and worldwide finance.

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Daniel Sparks owns shares of Tesla. "The problem for investors is that an investment in Tesla is an investment in Elon Musk", he said.

In its lawsuit, the SEC said Musk "calculated the $420 price per share based on a 20 percent premium over that day's closing share price because he thought 20 percent was a "standard premium" in going-private transactions". We think this is an overreaction and believe there is a 50-50 chance Musk remains CEO after this SEC matter is resolved and an even greater chance he remains involved somehow with Tesla in any case. Breakingviews cleverly posits that a Musk-less Tesla will reveal the true value of the innovative but financially challenged company. Tesla's board, which includes Musk's brother Kimbal Musk, is closely aligned with the CEO.

In the note, Tesla analyst Ryan Brinkman wrote: "We see a number of negative implications for Tesla shares stemming from this latest development, the most significant of which relates to the SEC's request that the court prohibit Mr. Musk from serving as an officer or director of any public company, including Tesla", which would cause the company's share price to drop.

Analysts and experts told CNN the SEC lawsuit brings a scourge of uncertainties to Tesla (TSLA), which is already grappling with intense business pressure. The company may need to find more than US$1-billion to repay convertible debts that come due in the next few months.

Shares were last down 10.8% at $274.17 in trading before the bell in NY, which would wipe about $6 billion off Tesla's market value.

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