The Securities and Exchange Commission has subpoenaed electric-carmaker Tesla in an inquiry into founder Elon Musk’s Twitter posts about a plan to take the company private, the Wall Street Journal reported.
The subpoena, part of a probe into whether Musk’s statement that he had obtained the funding needed to offer $420 a share to take the Palo Alto, Calif.-based company out of publicly-traded stock markets, sought information from each member of the board of directors, the Journal reported. The newspaper, which cited a source it didn’t name, didn’t specify what information was requested.
Both Tesla and the SEC declined to comment on the report. Tesla’s board said earlier this week that it had formed a special committee of independent directors to evaluate Musk’s proposal, but the company emphasized that it has yet to receive a formal offer.
The three-member panel, composed of Brad Buss, Robyn Denholm, and Linda Johnson Rice, will hire a financial adviser if and when an offer is made, the board said in a regulatory filing. Such committees are typically formed to avoid conflicts of interest when a company officer is involved in a transaction. Tesla’s committee has the board’s authorization to review and negotiate alternatives to any proposal, and its approval will be required for a deal.
Musk, who first tweeted about a buyout in early August, shared further details in an email to company employees and blog posts on Tesla’s website. He said Monday that Saudi Arabia’s sovereign wealth fund, which holds a 5 percent stake already, has repeatedly recommended taking the company private and is interested in funding the deal.
His understanding from the investor that no other approvals were needed was the basis for his Aug. 7 tweet that funding for the transaction had already been secured, Musk said, a comment that the Journal says drew the attention of the Securities and Exchange Commission.
Corporations making such announcements typically do so via press release, either before or after the New York Stock Exchange’s regular trading hours of 9:30 a.m. to 4 p.m., not on social media.
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Report: SEC subpoenas Tesla over Elon Musk's buyout tweetshttps://t.co/n7mRRHHHm0
— Washington Examiner (@dcexaminer) August 17, 2018
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