SEC summons Elon Musk over an old tweet from 2018
As per a subpoena filed a few days ago, Elon Musk is summoned by Securities and Exchange Commission.
SEC summons Elon Musk over an old tweet from 2018 and issues a subpoena to Tesla.
The rift between Elon Musk and SEC is not a new incident. Moreover, the narrative is as old as four years.
Some background as SEC summons Elon
Elon Musk is the founder of Tesla. It was founded in 2008. Further, it is a publicly traded company since 2010. Although on 7th August 2018, Elon Musk twitted from his Twitter handle a scandalous tweet. The tweet has become a yet another cause of friction between the SEC and Elon Musk. In the tweet, Elon wrote that he owns funds to take back Tesla and restore its status of privately traded company at the cost of $420/share.
His tweets usually lead to a torrent in stock market. Therefore, similar happens again. Thus, as soon as he tweets, ‘funding secured’, the price of Tesla’s stocks were registered to bounce upwards.
What are the reasons for summoning Elon Musk?
SEC launched an investigation immediately after it. As SEC summons Elon Musk, following are the rationale behind it:
- Firstly, Elon never disclosed any source of funding. Although, there was a meeting with Saudi Arab’s sovereign about wealth funds.
- Secondly, Elon does not seem to have not informed Tesla’s investors about the prospects of going private.
- Further, he did not appropriately consult his all the current investors whether they can remain with Tesla when it restores the status of a private company through ‘special purpose fund.
