Photo: bitcoinisle.com
Despite this week’s attempts from Elon Musk to calm the situation caused by the August 8 tweet through which he announced the world he is planning to take the company private, the Securities and Exchange Commission (SEC) appears to have gone forward with its investigation into the whys and hows of the matter.
As per a report by Fox Business, citing a person close to the matter, the SEC subpoenaed Tesla this week, making the investigation official.
The SEC became interested in the subject after Musk announced his brilliant idea and added that funding for taking Tesla private has been secured. In the organization’s rulebook, that’s a big no-no.
The SEC rules state that it is fraudulent to make an “announcement of a potential tender offer without the intention to commence the offer within a reasonable time and complete the offer,” thus manipulating the market price of the stock.
As announced, Musk plans to take Tesla private and shelter it from short sellers or shareholder public pressure. He is ready to offer those interested in selling their Tesla stock $420 per share, while Tesla employees will remain shareholders of the carmaker.
As said, Musk tried to clarify his position earlier this week, by detailing in a very structured post on Tesla’s blog what he meant by his written remarks.
He explains how representatives from the Saudi Arabian sovereign wealth fund – already holding a $2 billion stake in Tesla - have been pushing him to take the company private for almost two years, promising to financially back such a move.
The last meeting between Musk and the Saudi representative took place on July 31, and concluded with Musk having “no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving.”
The SEC became interested in the subject after Musk announced his brilliant idea and added that funding for taking Tesla private has been secured. In the organization’s rulebook, that’s a big no-no.
The SEC rules state that it is fraudulent to make an “announcement of a potential tender offer without the intention to commence the offer within a reasonable time and complete the offer,” thus manipulating the market price of the stock.
As announced, Musk plans to take Tesla private and shelter it from short sellers or shareholder public pressure. He is ready to offer those interested in selling their Tesla stock $420 per share, while Tesla employees will remain shareholders of the carmaker.
As said, Musk tried to clarify his position earlier this week, by detailing in a very structured post on Tesla’s blog what he meant by his written remarks.
He explains how representatives from the Saudi Arabian sovereign wealth fund – already holding a $2 billion stake in Tesla - have been pushing him to take the company private for almost two years, promising to financially back such a move.
The last meeting between Musk and the Saudi representative took place on July 31, and concluded with Musk having “no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving.”
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