SAN FRANCISCO (AP) — The Wall Street Journal is reporting that government regulators have subpoenaed Tesla as they dig deeper into CEO Elon Musk’s recent disclosure about a potential buyout of the electric car maker.
The subpoena from the Securities and Exchange Commission demands information from each of Tesla’s nine directors. The Journal cited an unidentified person familiar with the matter. Fox Business News was the first to report the SEC’s action.
Both Tesla and the SEC declined to comment Wednesday.
The SEC opened an inquiry shortly after Musk surprised investors with an August 7 tweet revealing that he lined up the financing to buy all the Tesla stock from shareholders willing to sell.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
The subpoena signals regulators have now opened a formal investigation into whether Musk was telling the truth in his tweet.
I don’t follow this shit. Eh, maybe I should. So what’s up with buying back your own company’s shares and going private? Is that not allowed? Is it a sign of fraud, doubling dealing, shorting the stock price, screwing over investors? I don’t get it. Anyone care to explain, because this article sure didn’t.
I THINK the concern is that if there was no intent to actually sell, by naming a price well above the current level, Musk was just hoping to run up the stock price…perhaps selling off some of his own stake. Manipulating the price is frowned upon.
He said that he has lined up financing to go private; and that is most likely a lie.
That then goosed the Stock price higher. Which if there isn’t true financing to take this private, is Stock manipulation.
Which to me is another indication of what is Elon pretty much is: a Con man.
Tesla is a money losing enterprise with an unlikely proposition of ever being profitable. So he is trying desperately to make it look like it will.
He wasn’t selling his own stock, he’s trying to bend over the short sellers that have been attacking TESLA for months now. By driving up the share price, the short sellers receive a margin call, requiring them to deposit more money in their brokerage accounts or else buy back the stock at a loss. Market manipulation-likely. But not at his own gain, at the misery and losses of the short sellers trying to drive their share price down.
Elon done f’ed up. Never make announcements that can move the stock price until the deal is done and the lawyers have approved it.
That’s C-Suite 101.