| 5:33 PM EST

SEC Subpoenas Tesla Over Musk’s Privatization Tweet

The U.S. Securities and Exchange Commission reportedly has subpoenaed Tesla Inc. about CEO Elon Musk’s tweet on Aug. 7 that he was considering delisting the company and had the necessary funding “secured” to buy shares at $420.
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The U.S. Securities and Exchange Commission reportedly has subpoenaed Tesla Inc. about CEO Elon Musk’s tweet on Aug. 7 that he was considering delisting the company and had the necessary funding “secured” to buy shares at $420.

The announcement caused a temporary 10% gain in Tesla’s stock price last week. The tweet also prompted at least two lawsuits that allege Musk’s claim about funding was misleading.

The SEC permits companies to use social media to make announcements. But Bloomberg News notes that the commission could charge Musk with market manipulation if he overstated the status of financing.

Musk has since indicated that Saudi Arabia’s sovereign wealth fund had expressed strong interest in taking Tesla private but did not commit to it. Analysts have estimated the move could cost $72 billion, although Musk says the figure would be significantly lower.

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