Tesla board scrambles to rein in Elon Musk

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Musk stunned Wall Street last week when he said on Twitter that he meant to take Tesla private at $420 per share, and added that funding was secured. At this point, it is unknown exactly what information the SEC wants to obtain from Tesla, as the subpoena itself has not been made public, however the likely materials sought would be material proof supporting the claim that funding had been secured for taking the company private.

The subpoena from the Securities and Exchange Commission demands information from each of Tesla's nine directors, according to a story published on Wednesday in The Wall Street Journal.

Musk on Monday explained in a blog post that his statements about financing were based on his conversations with Saudi Arabia's sovereign wealth fund and other investors.

Tesla's board of directors has been scrambling to contain any potential damage caused by Musk's August 7 tweet.

Saudi Aramco said last month it was working on a possible purchase of a strategic stake in SABIC from the PIF's 70% holding of company estimated at $70bn, but that deal needs months to develop.

Analysts said the watchdog's issuing of subpoenas against a company normally indicated it had begun a formal investigation into an issue.

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", Martin Tripp tweeted on Wednesday evening, before sending out dozens of photos that he alleges came from inside of Tesla.

The "Saudi sovereign fund has more than enough capital needed to execute on such a transaction", he suggested.

According to Bloomberg, the Saudi Fund disclosed in March that it hired Washington law firm Akin Gump Strauss Hauer & Feld LLP to lobby for approval of acquisitions in the USA, with a focus on CFIUS (Committee on Foreign Investment in the U.S.).

That tweet may have violated U.S. securities law if he misled investors. President Donald Trump's administration is stepping up scrutiny of foreign investment in American technology. However, as of Tuesday, Goldman was still negotiating its terms of engagement with Musk, according to a person familiar with the matter.

Tesla says it has formed a special committee of three independent directors to asses any proposal from Mr Musk.

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