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Elon Musk’s tweet investigated after suggestion to take Tesla private

Elon Musk’s tweet is being investigated after he said he was considering taking Tesla private last week.

The Securities and Exchange Commission (SEC) – US’s top financial watchdog – reportedly sent subpoenas to Tesla regarding his CEO’s plans to take the company private, after Musk’s tweet claimed he had ‘secured’ the financing for such a pricey transaction.

The publicly traded company and most valuable US automaker has a $70 billion price tag and would be the largest corporate buyout ever in US history.

The details of this potential deal are still uncertain, but a couple of posts on Tesla’s blog would hint at a possible transaction with Saudi Arabia.

Tesla’s board of directors tried to contain any potential damage caused by the CEO’s tweet, with some high-rank members urging Mr Musk to stop using Twitter altogether.

“We do not believe Elon Musk is at legal risk with his use of the term ‘funding secured’” Gene Munster, a Tesla investor and managing partner of venture capital firm Loup Ventures wrote in a note to investors on Monday.

“Today’s blog post argued it was Musk’s interpretation that the funding was secured. While we are not securities law experts, our interpretation is the previous meetings with the Saudis created enough grey area to dismiss stock manipulation legal risk from the SEC. That said there are at least two class action lawsuits underway which may take months to settle.”

Right after the announcement, Tesla stock had risen by 11%, making some people think the move could be part of an elaborate market plan. However, they fell 4% on the latest news.

At the time of writing, both representatives of Tesla and the SEC declined to comment.

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