Elon Musk’s Tesla Claim Could Land Him in Regulatory Trouble

Elon Musk

That would cost about $70 billion, making it one of the biggest buyouts in US history.

Since Tesla is also the most shorted stock in history, Musk said the company's doubters have incentive to bash the company and depress the company's share price. Though notably, that halt was not put in place until after Musk disclosed on Twitter that he was considering turning the company private.

Taking Tesla private would be an extreme albeit effective way of muting Tesla's bears, according to Michael O'Rourke, chief market strategist at JonesTrading.

Because 420 is the universal number indicating it's time to smoke some weed, it was easy to laugh off Musk's tweet as just one of his weird jokes. He later tweeted that the only uncertainty about completing the deal is whether he can gain shareholder approval.

His missive came minutes after the Financial Times reported that Saudi Arabia's Public Investment Fund had built an undisclosed stake of 3 per cent to 5 per cent this year, citing people with direct knowledge of the matter it didn't identify. And if the information in the tweet isn't true, Musk could be looking at some stock price manipulation allegations.

VideoJamie Albertine, Consumer Edge Research senior automotive analyst, discusses Tesla Inc.

Gene Munster of Loup Ventures, said Tuesday that Musk's tweet could fall within the guidelines of the SEC as long as investors have been alerted.

Without an official statement to back up the tweet, Nasdaq halted trading in Tesla shares shortly thereafter.

The SEC website explains that "Form 8-K is the "current report" companies must file with the SEC to announce major events that shareholders should know about".

When asked on Twitter whether he was serious, Musk replied: "Yes. This is not how you do it and it makes you wonder how seriously to take it", said Erik Gordon, a business and law professor at the University of MI.

Following the company's surge after last week's earnings, Musk took aim again at a short-seller in a reposted short YouTube video that likened these investors to Hitler's last days.

Camera IconTesla boss Elon Musk with the new Roadster. About an hour and a half later trading resumed and rose by more than 11 per cent.

Musk is leaving it to shareholders to decide if they want Tesla to privatize. It has lost money on an operating basis every year since it went public and it's been burning through billions of dollars as it's ironed out production issues with its Model 3 sedan.

The news caused Tesla's share price to jump by $14. The company underwent an initial public offering in 2010.

He also said that he would hold on to his almost 20% stake in the company if it were taken private, and that he wouldn't expect himself or any other investor to have a controlling vote after the buyout.

What on earth is happening to Tesla stock today?

Basically, I'm trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible.

Going private would reduce the market pressure on Tesla, especially from short sellers who believe Tesla is set up to fail and are pursuing strategies to profit from Tesla's troubles.



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