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 car that killed glamour

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.