SEC Recalls Tesla Over Elon Musk's Tweet
SEC Recalls Tesla Over Elon Musk's Tweet
According to Bloomberg, the Securities and Exchange Commission issued a subpoena to Tesla over Elon Musk's 2018 tweet about taking the company private.
News of the summons, which was issued on November 16, 2021, rekindles a more than four-year feud between Musk and the SEC. Musk sent the infamous tweet on August 7, 2018, in which he claimed to have the money to take Tesla private at $420 a share. (Tesla has been a publicly traded company since 2010.)
Musk said on Twitter that he has "funding secure" to withdraw the deal and buy out any shareholders who are no longer with the company. He published these tweets during the afternoon, while trading was still taking place, and the company's stock price jumped in reaction.
The SEC immediately launched an investigation, eventually concluding that, while he had had some meetings with Saudi Arabia's sovereign wealth fund, Musk had "never settled on a private transaction with any potential funding source at $420 per share". not discussed". Whether it would be possible for all existing investors to remain with Tesla as a private company through a 'special purpose fund', and Tesla's investors' support for the potential private transaction, was not confirmed.
A year later, Tesla and the SEC agreed that Musk's tweets about Tesla should be subject to more oversight. Per the agreement, a company attorney was named to pre-approved Musk's tweets about Tesla's financial health, sales, or distribution numbers -- estimated or otherwise -- as well as other specific topics.
But this hardly settled the dispute. In February 2019, the SEC asked a federal judge to hold Musk in contempt for sending false tweets, arguing it violated the terms of the settlement. (Musk tweeted that Tesla will make "approximately" 500,000 Model 3s this year, which appeared to conflict with the company's official guidance to deliver 400,000 cars from a total of 360,000 in 2019.)
Musk claimed the SEC was attempting an "unconstitutional power grab," and the agency said the Tesla CEO was in "gross violation" of the agreement. Eventually, both sides were ordered to settle things by a federal judge.
The latest subpoena was issued a little more than a week after Musk asked his followers in a poll whether he should sell 10 percent of his Tesla stake, apparently to pay more tax. The carmaker's shares fell 16 per cent in the next two trading days.
Musk was a vocal critic of the proposal to tax publicly traded assets for unrealistic gains to some of the wealthiest Americans. Under the offer, if there is an increase in the value of the property, even though the person did not sell the property, the person will have to pay tax on the unrealized gain. It would basically eliminate the tax loophole that allowed billionaires to defer capital gains taxes indefinitely while still being able to borrow against that money.
Tesla, which disclosed the summons in its 10-K filing to the SEC, did not elaborate on the nature of the agency's investigation, except that it was "seeking information about our governance processes around compliance with the SEC agreement." " , as amended."
Tesla did not respond to a request for comment; The company dissolved its public relations department in 2019 and has not responded to media requests since then. An SEC spokesman declined to comment.
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