Bobby Yip / Reuters

Two days after the Securities and Exchange Commission sued Elon Musk for securities fraud related to misleading tweets about Tesla, Musk and Tesla have reached an agreement with the SEC. The settlement allows Musk to stay on as CEO, but requires him to relinquish the role of chairman of the board, and not to seek that post again for three years. In addition, Musk must pay $20 million in fines and agree to comply with corporate communication processes. Tesla has also agreed to pay $20 million in fines and to appoint two new outside members to the board. Musk and Tesla agreed to the terms without admitting or denying wrongdoing. The settlement still must be approved by the federal court in Manhattan where it was filed.

Tesla’s stock cratered during Friday trading, dropping almost 14 percent after news of the lawsuit broke after hours on Thursday. That impact almost certainly pressed Musk and Tesla to pursue the settlement quickly. It also underscored Wall Street’s confusion over the news that Musk rejected a prior settlement offer, which had been the impetus for the SEC to file suit. According to reports, the SEC’s earlier settlement offer had also required Musk to give up the chairman’s seat, albeit for only two years instead of three.

The settlement represents a substantial compromise on the SEC’s part. Their lawsuit had asked for Musk to step down as CEO, and it sought to bar him from serving as the officer or director of a public company. Musk is the public face of Tesla, so the company (and its stock) would have surely suffered had this outcome been realized. And even if the matter were litigated, some experts have guessed that as much as 30 percent of Tesla’s value is contingent on Musk being its CEO.

The outcome will probably save Tesla—in the short term, anyway. But it speaks volumes about its CEO’s station, and how much it’s fallen. Yesterday, after the SEC lawsuit was filed, I said that Elon Musk is his own worst enemy. And not just because of the ill-advised tweets about a hypothetical leveraged buyout of Telsa. Musk’s troubles at Tesla started because his previous business successes, though substantial in financial terms, hadn’t brought him experience running and managing a public company, let alone one that had to design, manufacture, and distribute consumer goods at scale. He couldn’t control labor and production issues at his factories, sometimes casting his own management failures as treason on the part of his workers. Then he lashed out at the short sellers who took that news, partly accessible because Tesla had to make public filings, as a reason to bet against the company. Musk’s war on the media, carried out in public in sometimes embarrassing ways, only produced more problems.

The negotiation with the SEC only further cements Musk’s status as a self-saboteur. According to Reuters, Musk wouldn’t agree to the prior settlement offer because “he wouldn’t be truthful to himself,” and “wouldn’t have been able to live with” a compromise.

But when Musk called the SEC’s bluff, it acted quickly and decisively, filing a lawsuit with a far more serious set of demands than either settlement offered, among them the ouster of Musk as CEO. When you call someone’s bluff, and you’re right, then you look shrewd indeed. But that was not the case here. The SEC brought the hammer down immediately, revealing the strength of its hand. The market spoke, too, punishing Musk and Tesla for their foolhardiness. Settlement notwithstanding, nobody looks good here, except maybe the Securities and Exchange Commission.

The settlement is likely sufficient to stabilize the stock price, which sits at about $264 per share, more than $100 less than its value when Musk tweeted about taking the company private last month. Eventually, given changes to the company’s fundamentals, the stock price might rise to the levels Musk promised, a marijuana-laced target of $420 per share. And the Tesla board probably won’t seek to remove Musk, because, despite it all, the company depends on him as a figurehead.

That was enough in 2010, when Tesla went public, but now the vultures are circling. Mercedes, Ford, Volkswagen, and other manufacturers are aggressively pursuing electric vehicles, drafting behind the lead that Musk and Tesla piloted. No ordinary person knows who the CEO of Ford or VW is, but they probably don’t care, either. The proof is in the pudding: whether the cars ship and sell, and how quickly.

It feels like the end of an era for Elon Musk as indefatigable inventor-industrialist, no matter how Tesla or SpaceX or any of his other ventures perform. Musk’s reputation was predicated on cunning and audacity: His willingness to try things that had failed before, and to press hard on them until they succeeded. Electric cars. Reusable rockets. But many of them haven’t yet succeeded, not really. Tesla is a proof of concept for an industry, and it risks being overtaken. SpaceX has made a technological promise about space commerce and travel, but it remains an overblown government and commercial contractor. The Boring Company has ambition for a new kind of urban transit, and claims to have deals to realize it, but enormous uncertainty still faces it.

Now that Elon Musk has shown, with this SEC debacle, that he is not just a visionary but also a fool, it’s possible that the walls will continue crumbling around him. It almost feels like Musk himself has realized it, too. Yesterday evening, after the markets had closed and after what must have been an awful day of panicked negotiation with the SEC and his board, Musk posted a tweet that read, “And remember ... ” accompanied by a photo of the Tesla roadster he had launched into space in February.

Once deployed from the Falcon Heavy rocket, the Tesla was gently set into orbit between Earth and Mars, where it orbits the sun like any other celestial body. When he launched it, Musk announced that he expected the car to endure in space for hundreds of millions of years.

Yesterday’s tweet betrays desperation rather than swagger. It’s as if Musk was saying, No matter what happens, part of my legacy is out there for good, cemented into the interstellar backdrop. And he’s right. But at the same time, that Tesla floating up there in the cosmos is also just space junk, a relic from a man who flew, Icarus-like, full of giddy confidence, too close to the sun.

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