Securities and Exchange Commission Reportedly Investigating Tesla

Tesla CEO Elon Musk shocked the financial world yesterday when he used Twitter to announce he was thinking about taking the company private and had already secured enough funding to do so.

Musk isn’t exactly known for being honest, so it’s not too surprising The Wall Street Journal is reporting the United States Securities and Exchange Commission (SEC) is investigating whether or not Musk’s was telling the truth.

According the publication, the SEC has asked Tesla to answer several questions about the announcement. These reportedly include why the company decided to make such a major announcement on Twitter and if it believes “investor-protection rules had been met.”

After Musk made the tweet, trading of Tesla shares was temporarily halted as an official announcement was expected to follow shortly thereafter. None did and trading eventually resumed.

Musk suggested Tesla would pay $420 (£324.58 / €362.11) per share to take the company private and this caused demand for Tesla stock to soar. This pushed the stock price up nearly 11 percent to close the day at $379.57 (£293.33 / €327.25). However, the price has retreated a bit today.

Since Musk hasn’t provided any evidence or details about the funding, a number of people are skeptical about his claim. One of the skeptics was analyst Frank Schwope who told Reuters “Who gives $30 to $50 (£23.2 – £3.8.8 / €25.8 – €43) billion to buy back the shares? And if you stay as a shareholder you get less information than before and you depend more and more on Elon Musk.”

Tesla and Musk haven’t commented about the reported SEC investigation, but earlier today the company did release additional information about the possibility of going private. In a short statement, several Tesla board of members said Musk talked about taking the company private last week and “addressed the funding for this to occur.” The board said they ended up meeting several times to discuss the issue and are now “taking the appropriate next steps to evaluate” the proposal.

A lot of questions remain unanswered but, if Tesla goes through with the plan, it would reportedly be the largest leveraged buyout in history.

  • Earl Scheib

    Is this a surprise to anyone? I mean, who didn’t see this coming… especially after yesterday’s antics.

  • brn

    Called it!

  • Mr. EP9

    I did say Elon would get in trouble if he didn’t prove whether he was serious and apparently he’s gotten into trouble.

  • I’m surprised that many Tesla fanbois hasn’t greeted out commentary page, or they had no idea how stock works?

    • Belthronding

      the best comment ever

  • ▶️ ProtectOurHeritage ◀️

    Now is the time he should be ousted as CEO. He’s not fit to run any company by the looks of it.

    • BGM

      Both you and the SEC are very brave to go against the Supreme Lord of the Elonverse! He will consume you with his flamethrower!

      • ▶️ ProtectOurHeritage ◀️

        I don’t see it as bravery. Its just being honest.

  • G82FS

    But you cannot deny that Tesla is the company that has pushed the industry toward electric. The big players would have all been content to wait until the oil was almost gone before doing anything.

  • D4VE THEFIRST
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