SEC looking into Tesla after Elon Musk's tweets, reports say

CEO and lead designer at SpaceX and co-founder of Tesla speaks at the International Space Station Research and Development Conference in Washington

Shares were down 3 percent in premarket trading after closing up 11 percent at $379.57 on Tuesday.

Buying out all of Tesla's stock at $420 a share would value the company at over $80 billion - and although Musk said he had financial backing for it, he didn't give details. Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long term.

They said the board also addressed the issue of how to fund such a deal, but gave no details.

In a letter here after his tweet on Tuesday, Musk fleshed out his idea, suggesting shareholders would get the option to sell their shares for $420 each or remain investors in a private Tesla, out of the glare of Wall Street and its need for positive quarterly results.

However, it certainly looks like his messages on social media have had direct consequences on Elon Musk's personal fortune, and on his company's stock price: Tesla shares started Tuesday trading at about $340 and went as high as $387. "The board has met several times over the last week and is taking the appropriate next steps to evaluate this".

Six members of Tesla's board of directors issued a statement Wednesday, acknowledging that discussions have been ongoing since last week about going private.

Going private is one way to avoid scrutiny by the public market as Musk and the company tackle those challenges.

Musk owns an nearly 20 per cent stake in Tesla, meaning he'd still need roughly $70 billion in financing to take Tesla private. Musk owns about 20 percent of the Palo Alto, California, company's stock, so that likely would reduce the cost of the buyout.

"Basically, I'm trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible".

FILE PHOTO: Elon Musk, founder, CEO and lead designer at SpaceX and co-founder of Tesla, speaks at the International Space Station Research and Development Conference in Washington, U.S., July 19, 2017. Saudi Arabia's Public Investment Fund, a major backer of the Vision Fund, has built a $2 billion stake in Tesla already.

On Wednesday, Tesla's board said it was evaluating the proposal.

Two of the potential stumbling blocks to Musk's plan include the stock price premium not being enough to get the existing shareholders on board to support the sale and coming up short on the announced funding to complete the transition.

The statement was not from the company's full board of directors. The move is estimated to require north of $50 billion to buy out the public shareholders.

Related news:

Hot News

isis-killer-beheading-video-story-top The Academy announces new changes to the Oscars, including popular film category
Aug 08, 2018 - 22:34
Now the Oscars will take a page from the Tony Awards playbook by announcing some of the categories during commercial breaks. The airdate has been bumped up just for the 2020 telecast ― from February 23 to February 9 for 2020.

isis-killer-beheading-video-story-top Manafort defense questions star witness Gates about 'secret life'
Aug 08, 2018 - 21:43
He is expected to face a bruising cross-examination as defense lawyers try to undercut his credibility and pin the blame on him. Gates not only testified that he had committed crimes with Manafort but also admitted he stole money from his former boss.

isis-killer-beheading-video-story-top Liverpool target Nabil Fekir opens door to move away from Lyon
Aug 07, 2018 - 23:54
Fekir scored 18 goals for Lyon last season and can operate as a central attacking midfielder, on the flanks and even as a false 9.

isis-killer-beheading-video-story-top ‘The Bachelorette’ addressed Garrett’s Instagram controversy - but left out a crucial detail
Aug 07, 2018 - 23:50
Harrison surprised them with an all-expense-paid trip back to Thailand and a minivan, in honour of Garrett's first night gag. Becca admitted it was "a major thing" they had to talk about in the beginning stages of their off-camera relationship.

isis-killer-beheading-video-story-top Deadly California wildfire now 5th largest in state history
Aug 07, 2018 - 22:25
The fire burned slowly for days before winds suddenly whipped it up last week and drove it furiously through brush and timber. Hundreds of colleagues, family and friends attended a memorial service Saturday in Fresno for National Forest Service Capt.

isis-killer-beheading-video-story-top Elon Musk tweets about going private and shares 'skyrocket'
Aug 07, 2018 - 22:11
Tesla now has a market value around $60 billion, which would make its take-private price tag about $80 billion, Galloway said. It would be one of the biggest go-private deals on record with a price tag of about $72 billion, based on $420 per share.

isis-killer-beheading-video-story-top How will Manchester United line up in 2018-19?
Aug 06, 2018 - 16:02
Who Mourinho deploys on the right of attack might well decide just how close they go to overhauling City this season. They write: " Anthony Martial's future is also uncertain after he also failed to make the trip to Germany".

isis-killer-beheading-video-story-top Meghan Markle’s make-up artist shares video of her eating raspberries
Aug 06, 2018 - 15:46
Van Straubenzee has known the prince since childhood and was an usher at Harry and Meghan's wedding at Windsor Castle in May. Despite her struggles, Meghan has adopted some savvy techniques to make sure photos of her and Harry don't look too absurd.

isis-killer-beheading-video-story-top Multiple arrested in alleged Maduro assassination plot
Aug 06, 2018 - 14:59
A bang is heard and footage of his speech shows the president suddenly looking upwards and dozens of soldiers running away. The explosion, which the government said injured seven soldiers, took place during a televised Caracas military parade.

isis-killer-beheading-video-story-top Saudi Arabia expels Canadian envoy for urging activist's release
Aug 06, 2018 - 14:29
Their arrest was the latest in a government crackdown on activists, clerics and journalists. Riyadh also suspended new trade and investment with Canada.

isis-killer-beheading-video-story-top Chelsea to decide whether to step up Wilfried Zaha chase
Aug 06, 2018 - 13:30
But, Chelsea will hope to seal the deal when they table their late offer for the Ivory Coast global . Zaha has been linked with a move to Chelsea but Palace are unwilling to let their star man goes.

isis-killer-beheading-video-story-top Manchester United end transfer interest in £35m defender
Aug 06, 2018 - 12:06
The Toffees have cash to spend this summer, already highlighted by the £50 million arrival of Richarlison from Watford. Everton are understood to have been interested in Mina since his star performances for Colombia at the World Cup.

isis-killer-beheading-video-story-top ‘I like Mike!’: Trump disses LeBron James
Aug 04, 2018 - 22:44
LeBron James has yet to respond to Trump's comments. "He's doing an fantastic job for his community". Lemon's chief offense was apparently making James look smart, which Trump said "wasn't easy to do".

isis-killer-beheading-video-story-top Who is Emin Agalarov? Russian popstar who Mueller wants to question revealed
Aug 03, 2018 - 23:13
It is quite clear that the president's idea of Sessions ending Mueller's investigation did not go over well with Democrats. In a series of tweets, he said Attorney General Jeff Sessions must halt the inquiry into alleged election meddling.

isis-killer-beheading-video-story-top Iowa teen seriously hurt in "Kiki" challenge gone wrong
Aug 03, 2018 - 08:54
A Florida man's attempt at the "In My Feelings" challenge went horribly wrong when he was hit by a auto during the stunt. Anna has been dancing since she was very young and thought this would be a fun idea. "I will always remember that".