The Securities and Exchange Commission issued a subpoena to Tesla over Elon Musk’s 2018 tweet about taking the company private, according to Bloomberg.
The subpoena was issued just 10 days after Musk triggered a stock sell-off when he asked his Twitter followers if he should sell 10% of his stake in the company.
The news of the subpoena, which was issued November 16th, 2021, reignites a feud between Musk and the SEC that has been simmering for over four years.
Musk sent the notorious tweet on August 7th, 2018, in which he claimed to have the funding to take Tesla private at $420 a share. (Tesla has been a publicly traded company since 2010.)
Tesla’s stock price dipped by some 16% over the course of the two days of trading which followed the tweet.
Elon Musk said on Twitter that he had “funding secured” to pull off the deal and buy out any shareholders who didn’t want to stick with the company. He published these tweets during the afternoon while trading was still happening, and the company’s stock price jumped in response.
REIGNITING A FEUD BETWEEN MUSK AND THE SEC THAT HAS BEEN SIMMERING FOR OVER FOUR YEARS!!
A year later, Tesla and the SEC agreed that Musk’s tweets about Tesla should be subject to more oversight. As per the settlement, a company lawyer was designated to pre-approve Musk’s tweets about Tesla’s financial health, sales, or delivery numbers — estimated or otherwise — as well as other specific subjects.
But that hardly settled the dispute. In February 2019, the SEC asked a federal judge to hold Musk in contempt for sending out an inaccurate tweet, arguing it violated the terms of the agreement. (Musk tweeted Tesla would make “around” 500,000 Model 3s this year, which appeared to clash with the company’s official guidance of delivering 360,000 to 400,000 cars total in 2019.)
Last week, The Post exclusively revealed that Musk insisted his tweet about a 2018 buyout of Tesla was "entirely truthful."
He also agreed to pay $20 million while the company kicked in another $20 million in fines.
But Musk’s Twitter habit nearly landed him in hot water with the SEC again. The next year, the agency asked a judge to hold Musk in contempt after tweeting about Tesla’s production outlook without getting permission.
The latest subpoena was issued a little over a week after Musk tweeted a poll asking his followers whether he should sell 10 percent of his Tesla stake, ostensibly to pay more tax. The carmaker’s shares plunged 16 percent the following two trading days.
Tesla, which revealed the subpoena in its 10-K filing to the SEC, did not elaborate as to the nature of the agency’s investigation, except to say that it was “seeking information on our governance processes around compliance with the SEC settlement, as amended.”
Musk is also feuding with the United Auto Workers (UAW) union, a key ally of Biden’s. The National Labor Relations Board in March ordered Musk to delete a tweet that said Tesla workers could lose stock options if they voted to join the UAW. Tesla is appealing against that order.