Twitter may be a toxic platform for many users across the globe, but one cannot deny that the tweets of Elon Musk take things to a whole new level. Not only do they take social media by storm, but Musk often has had to face real-world consequences for his tweets.
This time, his EV company Tesla has received a subpoena from the US Securities and Exchange Commission regarding a settlement both parties had reached earlier. The settlement was over Musk’s tweet in 2018 about taking Tesla private. This also comes after Tesla’s stocks fell after Musk asked his followers on Twitter whether he should sell 10% of his Tesla stock.
You may have read our coverage about the 2018 tweet and the latest developments regarding it, but for the uninitiated, here is a recap. On August 7, 2018, Musk had taken to Twitter to announce that he was considering taking Tesla private at $420 per share, and that funding had been secured. It turned out that Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF) had agreed to fund a buyout of the company. (Recently, Musk said that his tweet was entirely truthful.)
However, the SEC launched an investigation, which found out Musk had not eventually discussed a going-private transaction at the price with any potential funding source. The investigation also found that he had done nothing to check whether it would be possible for all current investors to remain with Tesla as a private company, and had not confirmed the support of Tesla’s investors for the decision.
Musk was sued by the SEC for fraud and a settlement was reached. According to the settlement, Musk’s statements regarding Tesla would have to be approved by the company’s lawyers before they are posted. Additionally, Musk would step down as chairman of the board for three years, and Musk and Tesla were fined $20 million each.
Now, the subpoena (which was filed on November 16) seeks information on Tesla’s governance processes around compliance with the settlement to ensure that all the terms are being abided by and are not violated.
It seems that this is the latest development regarding the feud between Musk and the SEC. A year after Musk’s 2018 tweet, the SEC had asked a federal judge to hold Musk in contempt of the settlement for posting an inaccurate tweet about the number of vehicles Tesla would make in the year (the numbers Musk posted were very different from the actual number of vehicles Tesla made).