SEC Issues Tesla Subpoena: Elon Musk, You Just Got Served

SEC Issues Tesla Subpoena

Last week, Elon Musk tweeted that he was considering taking Tesla (NASDAQ:TSLA) private. To no surprise, this divided the stock market and has continued to do so this week. But now there’s more. On Wednesday, news of a Tesla subpoena hit the market, served by the only and only SEC.

Tesla Subpoena: Served by the SEC

For the past few days, different reports said the SEC was already looking into Tesla but has since intensified its probe, due to Musk’s controversial tweet about taking the company private.

These same reports said that the SEC’s inquiry is preliminary and that there’s no guarantee that it will lead to a formal inquiry – and yet here we are.

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Today, the New York Times reported that the SEC has officially served Tesla with a subpoena. By doing so, it marks the first steps in a formal inquiry by the agency. Now, some may be wondering what the big deal is. It is, after all, Musk’s company and he can (for the most part) take it in whatever direction he wishes too.

However, it’s the way that Musk went about it that is causing people to worry, particularly the SEC. Why? Because the Tesla CEO said he had already secured funding, and if that’s not true, Musk may have violated an SEC rule. That said, Musk has said this week that a Saudi fund wants to take the company private, justifying his comments.

The Tesla Stock Reacts

Apparently, the market isn’t too pleased with the news about the Tesla subpoena, which is understandable.

According to Yahoo Finance, as of 3:48 p.m. EDT, Tesla is trading at $339, which puts the stock down 2.41%. Luckily, the market is almost closed, so there’s no chance that the stock can drop even further — though there’s always the after-hours session.

The Takeaway

How do you feel about everything that’s happened with the possible Tesla private sale? Do you think this is something that would help the company? Or did Elon Musk just get himself into a tough position (once again) for no reason?

Let us know in the comments below!

Featured Image: twitter