Subpoenas have bene sent to Tesla Inc. by the U.S. Securities and Exchange Commission in relation to the plans of the company’s Chief Executive Elon Musk to privatize the company and in relation to the statement issued by Tusk where he had claimed that finding for the plan had been “secured,” reported the media quoting sources.
There was a drop of 4 per cent drop in the shares of the electric carmaker but after the announcement by Goldman Sachs Group Inc that it equity coverage for Tesla would be stopped by it since the firm is also acting as a financial advisor to Tesla, there was an increase in share prices of the company.
The statement by Goldman was seen as a confirmation for investors about the tweeted statement that was issued by Elon Musk earlier on Monday where he talked about working with Goldman. However, the subpoenas as reported by the media indicate that a formal investigation into a matter has been opened by the SEC.
There were no comments from either Tesla or the SEC.
There had been an increase of 11 per cent in the shares of Tesla last week after Musk tweeted about his plans to take Tesla private at $420 per share. Investors were surprised by the statement where Musk even said that funding for the move had been secured by him.
It was not until Monday that any details of the funding plans were provided by the Tesla CEO. On Monday, Musk used a blog published on Tesla’s website where he said that there were talks going on with sovereign wealth fund of Saudi Arabia along with other potential funders and added that nothing had been finalized about funding.
There was another tweet issued by Musk later in the night on Monday announcing that he was working with Goldman Sachs and private equity firm Silver Lake for their possible role as financial advisers. However, according to media reports, the terms and conditions of working with Musk were still being worked out by Goldman till Tuesday.
Musk might have violated U.S. securities law if investors had been misled by his tweet about obtaining secured funding. Lawyers said that the tweet by Musk indicated that he was more or less sure about funding but the statement itself gave the impression that he had in fact secured funding for taking Tesla private and the statement apparently overstated the status.
Media reports, citing source information claimed that an inquiry into Musk’s tweets had been opened by the SEC. Law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP had bene hired by the independent board members of Tesla, said the reports, and the law firm would help the company to tackle the SEC inquiry and other fiduciary duties related to the potential deal.
The Wall Street Journal said the SEC was seeking information from each Tesla director.
(Source:www.reuters.com)
There was a drop of 4 per cent drop in the shares of the electric carmaker but after the announcement by Goldman Sachs Group Inc that it equity coverage for Tesla would be stopped by it since the firm is also acting as a financial advisor to Tesla, there was an increase in share prices of the company.
The statement by Goldman was seen as a confirmation for investors about the tweeted statement that was issued by Elon Musk earlier on Monday where he talked about working with Goldman. However, the subpoenas as reported by the media indicate that a formal investigation into a matter has been opened by the SEC.
There were no comments from either Tesla or the SEC.
There had been an increase of 11 per cent in the shares of Tesla last week after Musk tweeted about his plans to take Tesla private at $420 per share. Investors were surprised by the statement where Musk even said that funding for the move had been secured by him.
It was not until Monday that any details of the funding plans were provided by the Tesla CEO. On Monday, Musk used a blog published on Tesla’s website where he said that there were talks going on with sovereign wealth fund of Saudi Arabia along with other potential funders and added that nothing had been finalized about funding.
There was another tweet issued by Musk later in the night on Monday announcing that he was working with Goldman Sachs and private equity firm Silver Lake for their possible role as financial advisers. However, according to media reports, the terms and conditions of working with Musk were still being worked out by Goldman till Tuesday.
Musk might have violated U.S. securities law if investors had been misled by his tweet about obtaining secured funding. Lawyers said that the tweet by Musk indicated that he was more or less sure about funding but the statement itself gave the impression that he had in fact secured funding for taking Tesla private and the statement apparently overstated the status.
Media reports, citing source information claimed that an inquiry into Musk’s tweets had been opened by the SEC. Law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP had bene hired by the independent board members of Tesla, said the reports, and the law firm would help the company to tackle the SEC inquiry and other fiduciary duties related to the potential deal.
The Wall Street Journal said the SEC was seeking information from each Tesla director.
(Source:www.reuters.com)
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