The Securities and Exchange Commission (SEC) has just hitTesla (NASDAQ: TSLA) with a subpoena just days after regulators began showing interest in a Twitter post made by Elon Musk, Tesla Chief Executive Officer and Founder, on August 7th regarding his considerations of taking the Company private.
“Am considering taking Tesla private at USD 420. Funding secured,” Musk said in a Twitter statement. Shares of the Company jumped almost 11% the day the post was made.
However, it has been reported that there have only been preliminary conversations with investors and that necessary financing was actually lined up.
A subpoena indicates that an inquiry has transitioned into a more formal stage and can possibly take years for an investigation for any action to occur, or no action at all if nothing results from the investigation.
The Company’s Board of Directors have been struggling with damage control following the tweet by Musk, with some members advising that Musk stop using Twitter completely. The Board’s independent directors hired law firm Paul, Weiss, Rifkind, Wharton & Garrison to represent it while the SEC investigation moves forward.
The depth of the SEC’s investigation is currently unclear. The SEC had been inquiring about issues at Tesla prior to the tweet made by Musk on August 7.