Time to face the music: US regulator wants answers over Musk tweet
Tesla shares fell tonight on reports that the US markets regulator is seeking to question the car giant’s executives over boss Elon Musk’s plan to take the company private.
The Securities and Exchange Commission (SEC) has sent subpoenas to Tesla as part of its investigation, Fox News reported.
Tesla’s shares dropped four per cent on the news, before recovering slightly to end the day 2.6 per cent down.
The colourful entrepreneur revealed his plan to take the firm private in a tweet last week, in which he said funding was “secured”. He did not provide further details about funding until Tesla published a blog post on Monday.
The blog post said that Musk was in talks with Saudi Arabia’s Public Investment Fund (PIF), but that funding was not nailed down.
Musk and Tesla are already facing at least two lawsuits over shareholder concerns that his tweet was designed to hurt short-sellers of Tesla stock. Short-sellers, who profit from a security losing value, were furious after Musk’s announcement drove Tesla shares up 11 per cent.
Reports today suggested Tesla’s board had put Musk on “tweet arrest”, banning him from posting more tweets.
Tesla declined to comment on the subpoena last night. The SEC could not be reached for comment