CCTV Script 02/10/18

— This is the script of CNBC's news report for China's CCTV on October 2, 2018, Tuesday.

Market sentiment on Monday is quite different from that in last Friday to Tesla, because of the reconciliation between Elon Musk and SEC. on the stock front, Tesla jumped 19% in pre-market trading and continued to rise after market opened, finally closed up more than 17.3%, erasing the biggest one day lost in 4 years happened last Friday. The host mentioned just now that the settlement includes fine and stepping down from chairman. Why the market considers it as a good thing? First, settlement reduces uncertainty of Tesla's future prospect.

If Musk failed to settle charges with SEC, then the litigation will last till Feb next year, obviously, a long-run uncertainty will bring Tesla into turbulence. And once Musk is convicted, Tesla may be stuck in daily operation and its funding capability get stroked amid Musk wouldn't be the leader. Currently, the Department of Justice is still carrying on investigation against Musk, and that is an independent case, but the settlement deal from the SEC might mark the official probe against Tesla and Musk has closed, and criminal charges from the Department of Justice is less likely to go on.

Musk will continue to be CEO and deal with day-to-day business, what's more, Musk will soon relinquish chairman and introduce new independent chairman though, he is still the major shareholder, and his decision-making ability and personal caliber will still lead the company, protecting shareholders' benefits further. Additionally, another driver for the overnight gains is Tesla's output might be on its track, pushing Tesla to make profits.

There is a report pointed out that Tesla electric car output in the 3rd quarter is estimated to hit a record of 800000, which is equal to the total amount in the first 2 quarters this year. Among that, including 53000 Model3, even though that is failed to reach Musk's target of 6000 per week, it has met the previous quarterly production target range. On weekend, Musk emailed staff, saying Tesla is almost to make profit and "if we go all out, we will achieve an epic victory" after reaching settlement.

This is probably for the best that Musk can strive for in light of current situation. There is 25% chance Musk remains Tesla CEO, analyst from the Wall Street told CNBC, so Musk remains as CEO is a missing-expectation. Next, who will be the new appointed chairman of the board and the 2 independent chairmen? Will they be able to constraint Musk's word and deed, those draw markets' attention. And the market hopes Musk can learn from the cocktail of risks, putting his focus on increasing business performance. We will keep an eye on this issue.