It sure has been an interesting week for Tesla CEO Elon Musk, and things might get worse before they get better. The controversy began last Tuesday when Musk startled his own company board by announcing that he might take Tesla private and, in fact, had "funding secured." Now the SEC is looking into how Musk handled the announcement, and one law professor tells the Wall Street Journal that "the probability that there will be an SEC enforcement action is, I think, quite high." Meanwhile, some bizarre accusations about Musk emerged from rapper Azealia Banks. Coverage:
- Musk's explanation: On Monday, Musk wrote in a blog that he's been in talks with Saudi Arabia's sovereign wealth fund to provide the needed money to take the company private. The post appeared to be an attempt to quell the controversy over his initial tweet, notes the New York Times, which talks to people familiar with the Saudi fund who say a deal is nowhere close. In fact, the story asserts that Musk made his initial tweet with "little forethought." On Monday, Musk also tweeted that he was getting legal and financial advice on a deal from Goldman Sachs and others.
- A visitor: Some unexpected insight into Musk's behavior over the weekend came from Azealia Banks, who says she was at his house as a guest, ostensibly to make music with Musk's girlfriend, the singer Grimes. "I saw him in the kitchen tucking his tail in between his legs scrounging for investors to cover his ass after that tweet," Banks tells Business Insider. "He was stressed and red in the face."
- He was on what? The Cut digs into Banks' remarkable social-media posts about the weekend, including one in which she accused Musk of making his controversial tweets while on acid. A Tesla spokesperson says that's "complete nonsense," reports Jalopnik, and Musk himself tells Gizmodo that he's never met Banks.
- The trouble: The SEC is looking into why Musk made such a huge announcement in such a flippant manner, as opposed to, say, in a regulatory filing. As the Journal notes: US "law forbids companies and corporate officers from providing misleading information about meaningful company events." A legal expert tells the newspaper that Musk's blog post Monday shows that his claim of "funding secured" was an overstatement, which could be a "virtually open-and-shut case" for the SEC, if they pursue it.
- From the Saudi view: Yes, lots of questions remain about how serious the Saudis are about partnering with Tesla, but the Washington Post points out a potential benefit: "It would represent the boldest move yet in the kingdom's campaign to build a post-oil future."
- Tesla's board: The company's directors have formed a committee of three board members to evaluate the idea of going private, reports CNNMoney. The position right now? Noncommittal. "The special committee has not yet received a formal proposal from Mr. Musk regarding any going private transaction nor has it reached any conclusion as to the advisability or feasibility of such a transaction," says a statement.
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