Another day, another update on the drama surrounding Tesla. Citing sources, Fox Business reports that the Securities and Exchange Commission has subpoenaed Tesla over tweets from CEO Elon Musk in which he said he had secured funding to take the company private.
SCOOP: SEC ramps up investigation into Tesla privatization plans; sends subpoenas to Tesla regarding privatization plans and Musk's statements involving "funding secured"–sources Subpoenas signal investigation has reached the "formal" stages — sources more now @FoxBusiness
— Charles Gasparino (@CGasparino) August 15, 2018
The reported subpoena from the SEC marks the beginning of a formal investigation into Tesla. The company’s stock is down nearly 3% as of this writing.
ICYMI: On August 7, Musk tweeted that he was considering taking Tesla private at $420 per share, “funding secured.” The tweet followed news that a Saudi investment fund had acquired a minority share in the business. That day, Tesla’s stock jumped up 11%. Since then questions have arisen about both the seriousness of the claim (one that Musk has stuck to despite evidence to the contrary) and whether Musk was intentionally trying to juice Tesla’s stock (thus thwarting short sellers).
The following day, the SEC reached out to Tesla, according to The Wall Street Journal.
Musk has since revealed vague plans to go private, mentioned that the Saudi fund might be interested in such a deal, and announced the formation of a special board committee to consider taking Tesla private, but no term sheet has emerged.
The Saudi fund has still not commented on the matter.
In the meantime, Tesla’s board is trying to mitigate the damage, according to the New York Times. Their first new rule for Musk? No more tweeting.