Tesla CEO Elon Musk's tweets about taking the company private and having the funding to do it has the SEC's attention.

The Securities and Exchange Commission is ramping up its investigation of Tesla Inc. in light of CEO Elon Musk’s recent tweets about taking the company private at $420 a share.

More precisely, they are interested in his assertion that he already has the funding in place. According to a Bloomberg report, the SEC’s San Francisco office was already investigating the company and the recent round of tweets escalated its interest.

Though it is not illegal for company officials to use twitter to promote Tesla, talking about potential buyout prices and issuing other proclamations that could artificially alter the California-based EV maker’s stock price could be reason for an investigation and ultimately charges.

The specific scope of the inquiry wasn’t confirmed by the SEC. The key point right now is whether or not the information Musk tweeted is truthful or at least intended to be so when it was sent. Tesla hasn’t offered up any more details on where or from whom the funding would come from.

(Tesla board backs consideration of Musk’s privatization plan. Click Here for the story.)

One reason why there may be suspicion is the fact that many who follow the company have been speculating that it may need additional funding in the near-term to keep the Model 3 rolling down the line.

Biz reporter Liz Claman pushed Musk for answers about taking the company private.

However, in the recent earnings call, Musk denied the company needs more money, saying it wouldn’t be going back to the capital markets. Additionally, he was asked by an analyst asked if Tesla had received a notice from a regulator that would prevent the company from raising capital.

Musk, who’s insisted for months that the company wouldn’t need to seek more funding this year, replied: “I’m not sure what you’re talking about, but there’s no such notice from a regulator.”

(Click Here for details about Musk’s plans to take the company private.)

The CEO apparently has the preliminary backing of the company’s board of directors, six of whom issued a statement yesterday saying that Musk broached the subject recently and they were considering its merits.

Musk's earlier tweets already had the SEC looking at the company.

They were considering his proposal and that they’d met with him previously to explore the strategy, including “discussion as to how being private could better serve Tesla’s long-term interests.”

Members of the board who signed the statement were Brad Buss, Robyn Denholm, Ira Ehrenpreis, Antonio Gracias, Linda Johnson Rice and James Murdoch. Two other the board members, Kimball Musk, Elon’s brother, and Steve Jurvetson, a venture capitalist, were not part of the statement.

(To see more about Tesla’s Q2 losses doubling, but profits promised in Q3, Click Here.)

Musk’s plan would be to take the company private at $420 a share. Ideally, he said, everyone would come along for the ride and retain their ownership stake — a notion he reiterated in subsequent tweets; however, for those who don’t want to, the price is a 20% over the share price on the day it reported its second quarter earnings.

Don't miss out!
Get Email Alerts
Receive the latest Automotive News in your Inbox!
Invalid email address
Send me emails
Give it a try. You can unsubscribe at any time.