Tesla and CEO Elon Musk have been sued by the Securities and Exchange Commission for fraud, according to court documents filed Thursday.
Shares of the automaker fell roughly 7 percent in extended trading Thursday. In August, Musk tweeted that he was considering taking Tesla private, adding “funding secured.”
Deschide un cont de tranzactionare!
Musk later explained he had been in discussions with the Saudi Arabian sovereign wealth fund and felt confident the funding would come through at his proposed price of $420 per share. Musk said in an interview with The New York Times that he calculated that take-private price by rounding $1 up from what would have been a 20 percent upside at the time.
“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 transaction,” the SEC alleged in its suit.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
“This calculation resulted in a price of $419, and Musk stated that 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.'”
Read the lawsuit as filed in the Manhattan District Court below, and download the file here:
