Elon Musk has found himself in hot water again after the Securities and Exchange Commission announced it is charging the Tesla CEO with fraud, based on “a series of false and misleading tweets about a potential transaction to take Tesla private.”
It came after Musk tweeted that he was “considering taking Tesla private at $420. Funding secured.”
But, according to a statement from the SEC, Musk had not actually secured funding for a transaction to take Tesla private, and in fact “he allegedly knew that the potential transaction was uncertain and subject to numerous contingencies.” The SEC also points out that the proposed $420 share price represented “a substantial premium to [Tesla’s] trading price at the time”.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
They have filed a lawsuit seeking to bar Musk from serving as an officer or a director for a publicly traded company in the future.
It added: “According to Musk, he calculated the $420 price per share based on a 20% premium over that day’s closing share price because he thought 20% was a ‘standard premium’ in going-private transactions.
“This calculation resulted in a price of $419, and Musk stated that 7 Case 1:18-cv-08865 Document 1 Filed 09/27/18 Page 8 of 23 he rounded the price up to $420 because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend ‘would find it funny, which admittedly is not a great reason to pick a price’.”
Musk recently courted controversy when he smoked a joint on Joe Rogan’s show. Tesla’s stock dipped by nine per cent as a result.
Last month, Azealia Banks claimed that Musk “got into weed cuz of me and he’s super entertained by 420”.
She also previously claimed that she had waited at Musk’s home while she awaited the opportunity to record with Grimes. The polarising tech tycoon later denied knowing her.