SEC investigating Musk tweet about taking Tesla private

The Internet and financial industry weren't the only ones to take notice Tuesday when Tesla CEO [NYSE: TSLA] Elon Musk took to Twitter floating the idea of taking the automaker private.

"I suspect the corporate lawyers are scrambling right now and hoping the SEC doesn't go after him and the company, because it could be viewed as a statement from Tesla", Peter Henning, a professor at Wayne State University Law School specializing in securities law, explained to the Detroit Free Press regarding Musk's tweet on Tuesday.

Tesla shares fell 2.4 percent to $370.34 on Wednesday after closing up 11 percent on Tuesday, ending about $50 per share below what Musk said he was considering offering.

Musk later elaborated in a letter to Tesla employees saying that he was exploring the option.

A cycle that continues to repeat itself - the rich get richer today as Elon Musk has reportedly added $1.4 billion to his net worth with a single tweet, according to Business Insider.

If the company went private, employees and shareholders would be given an opportunity to sell or buy their stock approximately every six months. "And if you stay as a shareholder you get less information than before and you depend more and more on Elon Musk".

The board had "met several times over the last week" to discuss going private, the statement said.

Musk has been under intense pressure this year to turn his company into a profitable higher-volume manufacturer, a prospect that has sent Tesla's valuation higher than that of GM.

Those who believe Musk is carrying out a vendetta against short sellers may point to a May 4 tweet suggesting he might have something up his sleeve.

The deal would be the biggest leveraged buyout of all time, beating the $45 billion record set by Texas power utility Energy Future Holdings.

They said this "included discussion as to how being private could better serve Tesla's long-term interests". In short, Musk believes going private can place the focus back on long-term planning, which is now viewed through the lens of how it will affect short-term quarterly finances.

Tesla is now valued at $63.8 billion. That report had already partly lifted Tesla's stock.

They did not include Mr Musk, his brother Kimbal Musk, and Steve Jurvetson, a venture capitalist.

No board member has come forward to back the plan. According people familiar with the matter, cited in a Bloomberg report on Wednesday, at least four of China's largest banks have started the appraisal process on loans to be used to build a Shanghai Tesla factory.

  • Eleanor Harrison