US SEC examining Musk's tweets on taking Tesla private


It is not clear if PIF is interested in financing Musk's proposed take-private deal.

If Musk can pull it off, he will have burnished his reputation as an eccentric visionary who has been compared to Tony Stark, the billionaire playboy depicted by actor Robert Downey the "Iron Man" movies. Securities and Exchange Commission has since begun to make its own inquiries to check the veracity of Musk's controversial tweet.

It all began when Musk tweeted about a plan to take electric vehicle manufacturers Tesla private, signing off his message with the words: "Funding secured".

"If the tweet was false, the liability could be in the billions of dollars", he said Thursday.

The reference to the company's stock is particularly relevant because Tesla shares immediately skyrocketed in the wake of Musk's tweet.

The SEC declined to comment to CNNMoney.

The entrepreneur owns about 20% of Tesla, meaning there is a potential conflict of interest should he head talks to take the automaker private.

"When Musk tweeted this, was he saying this was something that was definitely going to happen?" Tesla's share price jumped on that news.

SoftBank is now not interested in a deal for Tesla after earlier this year taking a stake in General Motors Co's self-driving unit, Cruise, Reuters reported earlier on Wednesday. If there is an indication the financing is shaky, it nearly certainly will expose the company and its CEO to allegations of market manipulation or fraud, Coffee and Henning said. Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company.

Tesla shares were suspended from trading for 90 minutes, during which the firm announced in a regulatory filing that the company is indeed looking at such privatization possibility although no decision has been made.

Tesla's share price surged after the tweet, rising by as much as 12%, to over $US381, before trading closed.

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"If (Musk's) motive was frustration with short sellers, then that could be a case of market manipulation", Coffee said. "Oh and uh short burn of the century comin (sic) soon", he wrote. He did say he had secured the funding at $420 per share, 19% above Thursday's closing price.

The wild ride for Elon Musk and Tesla shareholders shows no sign of slowing down.

Some of the fervor for a Tesla buyout faded Wednesday.

Tesla shares fell 1.5% to USA $ 374 in Wednesday's trading after closing 11% higher on Tuesday.

Tesla has many mom-and-pop investors. Tesla lost another $717.5 million in its most recent quarter.

Leaving the public marketplace isn't a new vision for Musk.

Some on Wall Street shared that view. Now the suspense is building to see who will provide the funding. "I am not sure it is beating him down, but I am sure he is sick of it".

Shares in Tesla were in fact already moving higher on Tuesday, before Musk's tweet, on the back of a report from the Financial Times that Saudi Arabia's Public Investment Fund (PIF) had taken a 3% to 5% stake in the electric carmaker worth $2 billion, which would make the PIF one of Tesla's biggest shareholders.

In turn, an internal Tesla market could encourage smaller investors to hold onto their stock, lowering the amount of money, which could be tens of billions, that Musk must raise for the buyout.

Mr Musk has said he would be looking to keep his ownership of Tesla at around 20 per cent in a buyout deal, and that a special goal vehicle, like the one that exists at his aerospace company SpaceX, would allow Tesla shareholders to remain invested if they so choose. Musk previously said that the company would hit that number by the end of 2017 and that sustaining such a production rate is critical for Tesla to become profitable.