SEC looking into Tesla after Elon Musk's tweets, reports say

Danny Moloshok  Reuters

"Last week, Elon opened a discussion with the board about taking the company private", six directors on Tesla's nine-member board said in a statement.

Tesla's board has confirmed that it will consider the proposal by chief executive Elon Musk to take it private.

The most obvious equity partners for Mr Musk would be a sovereign wealth fund such as Saudi Arabia's Public Investment Fund (PIF), which sources said had taken a stake of just below 5 percent in Tesla, or a major technology investment fund such as SoftBank Group Corp's Vision Fund, bankers said. "I wanted to let you know my rationale for this, and why I think this is the best path forward", Musk wrote in a blog post. Funding secured." But later the same day, he said "a final decision has not yet been made, "in an e-mail to the company's employees". A day earlier, shares rose more than 11% after Musk unexpectedly tweeted that he was exploring a move to take Tesla private at $420 per share.

The Tesla CEO is the company's largest shareholder, owning almost 20 percent. But he might have moved a little too fast for the tastes of federal regulators.

Elon Musk's tweets early on Tuesday caused plenty of speculation and controversy.

The tweet came after an earlier report from the Financial Times that said Saudi Arabia's sovereign wealth fund bought a 3 to 5 percent stake in the electric vehicle maker, according to people with direct knowledge of the matter.

The leveraged buyback would be one of the largest in history, with Tesla's estimated worth around $70 to $80 billion.

Taking Tesla private would also free Musk from his tumultuous relationship with Wall Street as a whole, which had been consuming a significant portion of his time as well as a significant amount of all news surrounding the automaker. Tesla lost another $717.5 million in its most recent quarter.

If the content of Musk's tweet was not true, lawyers argue, it could expose Tesla's mercurial chief executive officer and the company to regulatory action and private lawsuits.

I drove the regular, 271-hp, rear-wheel-drive Tesla Model 3 a few months ago and liked it.

Former SEC chair Harvey Pitt told CNBC that while the USA stock market regulator permits executives of publicly listed companies to use social media to make statements about their businesses, Musk's tweet was still "highly unprecedented". Many initially thought it was Elon Musk's attempt at a bad joke about marijuana, because "420" has always been associated with pot.

The whole thing isn't yet set in stone because it must be put to a shareholder vote.

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