In case you haven’t heard, Elon Musk tweeted yesterday and rocketed his company’s stock. Now, the Securities and Exchange Commission is asking questions. That’s according to a new report from the Wall Street Journal, citing sources. The SEC is not commenting on a possible investigation and Tesla has not yet returned a request for comment.
At 12:48 ET Tuesday, Elon Musk shot off this: “Am considering taking Tesla private at $420. Funding secured.” By the end of the day, Musk had released vague plans to go private via an internal email (though it remains unclear who exactly would take the company private), and Tesla’s stock price made an 11% gain. Tesla’s board has apparently met several times to discuss a proposal to go private, the Wall Street Journal reported yesterday.
Announcing corporate plans via Twitter, though not normal, isn’t illegal. Manipulating the stock market, however, is. Where Tesla could be in trouble is if there aren’t real plans to go private. According to the report, the SEC is asking whether what Musk said was true and why he chose to announce via Twitter.
Tesla’s stock closed down nearly 2.5%, though it appears to be moving marginally upwards in after-hours trades.