Tesla shares fall on reports of SEC subpoena


Musk stunned investors and sent Tesla's shares soaring 11% when he tweeted early last week that he was considering taking Tesla private at $420 per share and that he had secured funding for the potential deal.

The SEC became interested in the subject after Musk announced his brilliant idea and added that funding for taking Tesla private has been secured. "While, we forecast H2 Model 3 production of 123k units, following our trip, we believe our estimate could be 4 to 7% too low", wrote the analyst in the research report.

Nearly a week later, Musk said his confidence was based on conversations with Saudi Arabia's Public Investment Fund, which first expressed interest in helping take the company private in early 2017.

In one tweet, Tripp shows what he alleges is proof that Tesla stores waste and scraps in open parking lots and trucks at the Gigafactory, instead of properly storing them in temperature-controlled warehouses.

Reuters reported on Wednesday that the PIF's other commitments in Saudi stocks and other investment projects would mean it was unlikely to play a significant role in any Tesla buyout.

Tesla and the Securities and Exchange Commission declined to comment on the Fox report. Official of Saudi's PIF have said it is not interested.

According to Bloomberg, the Saudi Fund disclosed in March that it hired Washington law firm Akin Gump Strauss Hauer & Feld LLP to lobby for approval of acquisitions in the US, with a focus on CFIUS (Committee on Foreign Investment in the U.S.). "Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction". Assets owned by the PIF can not be monetized quickly without driving down prices in the local stock market, while selling many of them would conflict with another of the PIF's declared roles.

The tweet may have violated U.S. securities law if it turns out to be untrue, lawyers have said. Musk will be under the scrutiny of CFIUS (Committee on Foreign Investment in the U.S.) as the Trump administration enforces more scrutiny over foreign investments in American technology.

According to the New York Times, the regulator validated those theories Wednesday.

Teslas' board of directors is also understood to have sought legal advice and will retain their independent financial adviser to assess any potential Musk plan.