SEC Takes a Closer Look at Musk After Private Tesla Tweet

Playing with the stock exchange is like playing with fire, and Elon Musk might find that out on his own, should the rumors that surfaced this week turn out to be true.
Musk's statements might prompt an SEC review 1 photo
On Tuesday, as if announcing to the world the launch of a new car model, Musk tweeted that he is considering taking Tesla private at a price of $420 per share. In itself, the statement sent Tesla shares skywards, but that might have been the end of it.

Unfortunately for Musk, he added that he is considering such a move because “funding secured.” And at that, guys over at Securities and Exchange Commission (SEC) raised one or two eyebrows.

As soon as Musk tweeted his thoughts, rumors started surfacing that the SEC might begin a review of his claims. It all began, says Forbes, with a question the SEC asked Musk to verify that his tweet is accurate.

Of course, we all know it’s accurate, as the man so eloquently stated in an email sent to Tesla employees.

CNBC, citing former SEC enforcement lawyers, says that the agency might have already opened an investigation to see whether the funding claims made by Musk are based on actual documents.

That’s because one of the SEC rules states 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.

Of course, it is unlikely Musk doesn’t know about this rule. It is also unlikely he spoke without cause as, crazy as he’s statements have been in the past, they pretty much all came to pass.

Musk’s plan, which will likely unfold very fast, is to restructure Tesla ownership to mimic that of SpaceX, with external and employee shareholders having the opportunity to sell or buy every six months.

Those who already have a stake in Tesla would get the chance to either stay as investors or get out at a price of $420 per share.
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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