SEC sparks worry
Tesla shares dive on subpoena news
Tesla shares fell Wednesday following a report that the US Securities and Exchange Commission has advanced its investigation into the electric-car maker.
The SEC sent subpoenas to Tesla regarding Chief Executive Elon Musk’s tweeted intentions to take the company private. The tweet stated that funding was “secured,” Fox Business reported on Wednesday, citing sources.
Subpoenas typically indicate the SEC has opened a formal investigation into a matter. Both Tesla and the SEC declined The Post’s request for comment.
The Palo Alto, Calif.-based company’s shares, which fell as much as 4 percent on the news of the subpoenas, closed down 2.6 percent for the day, at $338.69.
Tesla shares cut their losses after Goldman Sachs said it was dropping equity
coverage of Tesla because it is acting as a financial adviser on a matter related to the automaker. Investors viewed the news as confirming a tweet from Musk on Tuesday about hiring Goldman.
Musk set off a flurry of
trading and speculation last week when he tweeted that he had the “funding secured” to take the company private at $420 a share, about 20 percent higher than where it was trading that morning.
The shocking message sent
shares up 11 percent that day.
Musk shared no further details about the mystery funding until Monday, when he revealed that the cash needed to complete the $72 billion deal could come from Saudi Arabia’s sovereign wealth fund, which he said had approached him “multiple times.”
Musk also tweeted on Monday he was working with Goldman Sachs and private equity firm Silver Lake as financial advisers.
The 47-year-old billionaire’s tweet about secured funding may have violated US securities law if he misled investors.
“If the SEC wants to sue, they have an open-and-shut case,” Columbia Law School professor John Coffee told The Post this week. “He conceded that he had nothing more than a potentially interested investor who might want to hear more.”