"Funding Secured" Tweet From Elon Musk Will Likely Face Repercussions From SEC

The Tesla logo as it was in the year 2018 on the back of a white car.  Zoomed in.In the early hours of Saturday morning, Tesla revealed that the company would not be going private.

In a blog posting titled "Staying Public", Tesla CEO Elon Musk revealed that he went to the Board of Directors and indicated that the company should remain public after consulting with shareholders. The Board of Directors "agreed", and Tesla will remain a publicly traded company.


There is obviously much, much more to this story, and it is not over now that Musk has said that the company will remain publicly traded.

The SEC, for instance, is reportedly investigating Elon Musk's "Funding Secured" Tweet in which he said that the funding had been secured for a buyout at $420/share. Shares of Tesla spiked on this news, though when it was revealed that the funding had not, in fact, been secured, the gains were quickly erased.

Elon Musk has been battling short sellers for months now, and the SEC will investigate whether or not the "Funding Secured" Tweet was simply a way to "burn" short sellers. If that is the case, Elon Musk and Tesla may find themselves in a bunch of trouble from the SEC.

For his part, Musk maintains that there was significant interest in taking Tesla private, though it is a stretch to imagine where the tens of billions of dollars necessary to close the transaction would have come from.


Tesla is certainly not valued like a traditional company. If you own shares in Tesla, you own them because of the vision of the future that Elon Musk has laid out. You own them because of the promises that Elon Musk has made to you.

Given the events of the past few months and Musk's increasingly erratic behavior (this is not up for debate), do you still believe in Elon Musk? If he makes a breathless proclamation about a future Tesla product, will you believe him?


One more point that is worth mentioning, as it is interesting to me.

Many Tesla shareholders believe that the company will be worth many multiples of what it is worth now.

If that is the case, why were so many Tesla shareholders eager to sell at $420/share?

Filed under: General Market News

Related Articles