Displaying items by tag: tweet

(New York)

Well it finally happened. Investors had been waiting anxiously to see if the SEC would act over Elon Musk’s highly unusual way of announcing his buyout intentions last week. Musk tweeted out his plans to take the company private at $420 per share. The SEC has been looking into whether this is a violation of disclosure rules or even intentionally misleading information. The big question is whether Musk actually had the “funding secured” as he said, because if not, it could be the basis for a market manipulation charge. At least two lawsuits have been filed against Tesla since the tweet.

FINSUM: So the SEC says companies are allowed to announce material info over social media, so this case is really just about whether the statement was misleading.

(Washington)

In what seems to have amounted to the “shot heard round the world” of financial markets, this week Elon Musk, Tesla CEO, tweeted that he may take the company private at $420 and that he already had the funding secured. As expected, this sent markets into a tizzy, with the stock gaining sharply as it moved towards the stated price. Now, however, the SEC has announced it is investigating the legality of the tweet, and is investigating the particular statements made. The SEC maintains that such a statement should have been made in an SEC filing rather than a tweet, and it wants to investigate if funding was actually secured. If not, it could mean Musk was intentionally misleading the market.

FINSUM: Musk has been on a very rocky path lately, and this SEC inquiry is not going to help. That said, the idea of taking Tesla private still seems like a good one to us.