S.E.C. Is Said to Subpoena Tesla After Elon Musk’s Take-Private Tweet

The New York Times:

Federal securities regulators have served Tesla with a subpoena, according to a person familiar with the investigation, increasing pressure on the electric car company as it deals with the fallout from several recent actions by its chief executive, Elon Musk.

The subpoena, from the Securities and Exchange Commission, comes days after regulators began inquiring about an Aug. 7 Twitter post by Mr. Musk, in which he said he was considering converting Tesla to a private company. In the post, he said that the financing for such a transaction, which would probably run into the tens of billions of dollars, had been “secured.” […]

It has become clear since then that neither Mr. Musk nor Tesla had actually lined up the necessary financing aside from having preliminary conversations with some investors.

Maybe nothing will ultimately come of this, I don’t know. But Musk has gotten himself in serious trouble with his impulsive tweet.

When I linked to a Business Insider story about this a few days ago, a bunch of readers emailed to complain that the reporter behind that piece, Linette Lopez, is biased against Tesla and on the side of Tesla short-sellers. Others emailed to ask why I’m “against” Tesla.

I’m not against Tesla. I think they’re an amazing and fascinating company and their cars are outstanding and quite possibly without peer. Even if we concede for the sake of argument that Lopez is biased on the side of Tesla short-sellers, that doesn’t mean her report on this story was wrong. All of this can be true: Tesla has great technology and makes great cars, the company may have a bright future, and Elon Musk is a visionary. But all of that can be true and Musk may have committed securities fraud by tweeting that he’d secured funding to take the company private when he had done no such thing.

Wednesday, 15 August 2018