The Securities in addition to Exchange Commission will be looking into whether Tesla CEO Elon Musk tweeted about taking the company private in order to hurt those who were shorting Tesla’s stock, according to a report within the Wall Street Journal Thursday.
The agency will be pressing Tesla’s board for details on how much information he shared with them prior to announcing his plans on Twitter, the report said, citing a source. Two key questions are what Musk may have told directors before he spoke publicly about the possibility of taking Tesla private in addition to when he spoke to them.
Tesla declined to comment. The SEC did not immediately respond to a request for comment.
Last week, short-sellers betting against Tesla lost big after the CEO tweeted “considering taking Tesla private at $420 a share. Funding secured.” At which level, the company could be valued at $72 billion.
Tesla shares rose 11 percent following Musk’s tweet on Aug. 7, meaning short sellers lost about $1.3 billion in mark-to-market losses, according to estimates coming from financial technology in addition to analytics firm S3 Partners.
The data firm said roughly 35 million Tesla shares are held short in addition to the cumulative mark-to-market paper loss for those betting against the automaker as of last week was roughly $3 billion with This specific year. Short selling will be a practice in which traders can bet against a company by selling shares they don’t own in addition to buying them back at a lower cost.
There are few if any details on where the money for a deal like This specific could come coming from. Some legal experts have said which if Musk genuinely had not secured the funding for the deal, he could be accused of fraud or market manipulation.
Since his first tweet Musk said in a blog post which he had had conversations with members of the Saudi Arabian wealth fund about investing in a buyout deal, in addition to said he will be working with Silver Lake Partners in addition to Goldman Sachs on the deal. Goldman Sachs moved Tesla to “not rated” status on Wednesday in addition to confirmed the idea will be advising Musk on the deal.
Tesla shares closed Thursday at $335.45, down less than 1 percent, in addition to valuing the company at $57.2 billion.