Regulators at the Security and Exchange Commission are trying to determine if Tesla CEO Elon Musk lied in a tweet Tuesday about possibly taking the electric vehicle company private, The Wall Street Journal reported Wednesday.
SEC asked the company if Musk’s announcement was factual, sources familiar with the situation told TheWSJ. Regulators also want to know why the disclosure was made on Twitter, and whether the company believes the tweet complies with investor-protection rules.
Musk told his Twitter followers that he has secured “funding” to take the company private at $420 per share, far more than the company’s current worth. His tweet followed a report suggesting Saudi Arabia became a major Tesla shareholder earlier in 2018.
Some Tesla fanatics floated the possibility that the tech billionaire’s tweet was a troll job — experts suggest his tweets could be illegal if they do not contain factually accurate information about Tesla. (RELATED: Tesla Is Begging Suppliers For Cash As Elon Musk Mouths Off On Twitter)
Harvey Pitt, a former Securities and Exchange Commission chairman, for instance, told CNBC after the Saudi report that the tweets “might constitute fraud if any of the facts he disclosed are not true” or if there is any indication he composed the tweet to boost Tesla’s stock.
Saudi’s Public Investment Fund (PIF) bought up 5 percent of the electric vehicle maker’s shares in 2018, sources told the Financial Times. The PIF’s position is worth between $1.7 billion and $2.9 billion at Tesla’s current share price. The stake makes the fund one of Tesla’s eight biggest shareholders.
PIF’s large purchase came amid reports Musk spoke with tech billionaire investor Masayoshi in 2017 about Son’s SoftBank Group investing in Tesla, including potentially taking the electric carmaker private, Bloomberg reported Wednesday. Tesla was trading at roughly $300 per share at the time of the discussion, which ended after disputes about company control. The company is now at $375.
Read on The Source