SEC Sends Subpoena to Tesla in Probe Over Musk Tweets

Tesla CEO Elon Musk

It isn't known what information is being sought.

Regardless of whether Tesla does go private, it's unlikely to do so before its third-quarter earnings call in November when Musk may face more questions about the lawsuits, funding to go private, Tesla production, and any SEC investigation.

Under rule 14e-8 of the Securities and Exchange Commission, publicly traded companies are prohibited from announcing plans to buy or sell securities if executives don't intend to follow through, either don't have the means to complete the deal, or intend to manipulate the stock price.

The subpoena signals regulators have now opened a formal investigation into whether Musk was telling the truth in his tweet.

The representatives of Tesla were sure that Elon Musk was "out of control" and asked him to stop discussing the situation in the company on Twitter.

The electric auto company CEO blurted out on Twitter last week that he plans to buy back Tesla from shareholders.

A Tesla sales and service center is shown in Costa Mesa, California, U.S., June 28, 2018.

They have erased all their gains following Musk's tweet.

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Nearly a week later, Musk said his confidence was based on conversations with Saudi Arabia's Public Investment Fund, which first expressed interest in helping take the company private in early 2017.

A week later, the SEC is reportedly subpoena-ing the eccentric billionaire. "Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction".

The current currency volatility in emerging markets and the British pound are also under the microscope - a boon for United Kingdom expats sending cash back to the United Kingdom, as Sudesh Giriyan, chief operating officer on the UAE-based worldwide remittances company Xpress Money later explains.

Musk will also likely require clearance from USA national security officials if financing comes from Saudi Arabia, according to Bloomberg. President Donald Trump's administration is stepping up scrutiny of foreign investment in American technology.

In the meantime, Tesla's board is trying to mitigate the damage, according to the New York Times.

Musk also tweeted late Monday night he was working with Goldman Sachs and private equity firm Silver Lake as financial advisers. The newspaper cited an unidentified person familiar with the matter after Fox Business News reported the SEC's move.

Tesla's board of directors said Tuesday it had formed a special committee to consider the proposal.

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