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SEC Subpoenas Tesla over Musk's Premature Go-Private Tweets

18 August 2018

As per a report by Fox Business, citing a person close to the matter, the SEC subpoenaed Tesla this week, making the investigation official.

On Tuesday, Musk tweeted that Tesla had hired investment advisors from Goldman Sachs and Silver Lake Capital to help facilitate the buyout.

The SEC became interested in the subject after Musk announced his brilliant idea and added that funding for taking Tesla private has been secured. The company's stock is down almost 3% as of this writing.

The SEC and Tesla declined to comment on the reports.

Earlier this week, Musk said his funding claims referred to conversations with the Saudi sovereign wealth fund, which he said had approached him "multiple times" about taking the electric vehicle company private.

Some Tesla board members were reportedly caught off guard by Musk's tweets and have urged the controversial chief executive to stop using the social media platform.

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The subpoena signals regulators have now opened a formal investigation into whether Musk was telling the truth in his tweet about have financing locked up for a deal that analysts have estimated would require US$25 billion (NZ$38 billion) to US$50b.

The fledgling EV makers shares fell as much as 4% but cut their losses after Goldman Sachs Group Inc (NYSE:GS) said it was dropping equity coverage of Tesla because it is acting as a financial adviser on a matter related to the automaker.

More Money: Priced out of the market? However, as of August 14, Goldman was still negotiating its terms of engagement with Musk, according to a person familiar with the matter.

Musk will also likely require clearance from US national security officials if financing comes from Saudi Arabia, according to Bloomberg.

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

SEC Subpoenas Tesla over Musk's Premature Go-Private Tweets