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Published: Thu, August 09, 2018
Economy | By Melissa Porter

SEC looking into Tesla after Elon Musk's tweets, reports say

SEC looking into Tesla after Elon Musk's tweets, reports say

On Tuesday, Musk posted on Twitter that he is considering taking Tesla private at $420 a share, then adding that he has secured funding.

Midway through the trading session in NY on Wednesday, Tesla shares were down 5% at $374 after surging 11% on Tuesday. "Funding secured", the message from Musk, sent out nonchalantly on Tuesday afternoon, stated.

Musk is CEO and chairman of Tesla. The surprise announcement was sandwiched between other provocative tweets and, among other things, promptly caused a temporary halt in the trading of Tesla shares on Wall Street while also causing some to doubt if Musk was being serious.

Tesla CEO Elon Musk is seeking relief from the pressures of running a publicly held company with a US$72 billion (NZ$108 billion) buyout of the electric auto maker, but he may be acquiring new headaches with his peculiar handling of the proposed deal.

"Just because" Musk wants it at $420 "doesn't mean that there aren't other people who might be willing to come in with another transaction that would be more beneficial to shareholders", Pitt said. He called the funding "secured" for what would be the biggest-ever corporate buyout, but he hasn't disclosed details.

In a statement on Tesla's website https://bit.ly/2vJiaMm, six of Tesla's nine directors said the board had met several times over the last week to discuss such an idea and was "taking the appropriate next steps to evaluate this".

If we turn to the Street in general, we can see that Wall Street has a neutral point of view on Tesla, with TipRanks analytics exhibiting TSLA as a Hold. He claims Tesla is the most shorted stock "in the history of the stock market" and that going private would remove them from the narrative.

As far as SEC rules go, using social media for public company announcements is fine if investors are alerted prior to the announcement.

"Am considering taking Tesla private at $420".

SoftBank is now not interested in a deal for Tesla after earlier this year taking a stake in General Motors Co's self-driving unit, Cruise, Reuters reported earlier on Wednesday.

Mr Musk has feuded publicly with regulators, critics, short sellers and reporters, and some analysts suggested that less transparency would be welcomed by Musk. The value of his shares at that price would total $72 billion, short of the $100 billion performance bar it must cross for him to be able to exercise his $2.6 billion stock-option grant, Bloomberg noted.

He's also Tesla's largest shareholder.

Names excluded from the board statement were Musk; his brother, Kimbal Musk; and Steve Jurvetson, a venture capitalist and early Tesla backer who's been on leave since a year ago.

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