Tesla tweet 'highly problematic,' says former SEC boss

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Tesla shares rose 2.3 per cent to $360.61 in trading Friday before United States exchanges opened. He and Antonio Gracias, Tesla's lead independent director, bowed out of the process of the company acquiring SolarCity Corporation in 2016. Musk, who's insisted for months that the company wouldn't need to seek more funding this year, replied: "I'm not sure what you're talking about, but there's no such notice from a regulator".

"For most folks who own Tesla and SpaceX, they recognize these are long-term investments", the ex-employee said.

Musk followed up his tweets with several others, easing shareholders' concerns by explaining that their stakes can remain in the company in a special fund, or that they can sell them off at $420 each. "Tesla ignored the approach, prompting PIF to begin acquiring shares in the company through stock markets, with the assistance of JP Morgan".

Mr Musk, a 47-year-old investor and engineer, stunned financial markets on Tuesday, when he revealed on Twitter he was considering a take-private deal for Tesla, an auto manufacturing pioneer that developed the world's first ever premium all-electric sedan vehicle. "So it'd have to be equity, and there's not enough stupid money to buy this company at an $80 billion valuation". The share price jumped 3 percent immediately after the news. But federal securities laws do allow smaller investors to retain stakes in public companies that decide to go private, said Erik Weingold, an attorney who specializes in private placements.

Tesla has many mom-and-pop investors.

Mr Musk has said he would be looking to keep his ownership of Tesla at around 20 per cent in a buyout deal, and that a special goal vehicle, like the one that exists at his aerospace company SpaceX, would allow Tesla shareholders to remain invested if they so choose. And that doesn't include Tesla shareholders who hold their stock under the name of their bank or brokerage, a figure that is "substantially greater" than the one for shareholders of record, Tesla filings say.

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Tesla CEO Elon Musk has confirmed that the company is working on its own chip designs for AI-based tasks in its cars. Regulations cap the number of investors in a private company at 2,000.

While that doesn't mean Musk has done anything improper, it's unclear what the South African billionaire meant when he said he had "secured" the funding.

"I don't really understand the idea of what was suggested in the potential for them to go private", Dick Weil, CEO of Janus Henderson Group, said in an interview with Bloomberg Television. Or they may just have been mischief aimed at the plodding bureaucrats at the SEC and the New York Stock Exchange to see how they would react to a market-moving tweet launched on a low-volume mid-August trading day.

The losses came amid news that the US Securities and Exchange Commission was "intensifying" a probe into Musk's statement, as Bloomberg reported. While Tesla undoubtedly has excellent executives and a cadre of top professional talent, it seems to me that these funders are making an extraordinarily large bet on one man and his ability to achieve his vision.

Tesla disclosed in its most recent quarterly report that it has "received requests for information from regulators and governmental authorities", including the SEC.

In summation, Tesla stock is even more volatile than usual, Elon Musk says some wild stuff on Twitter, and the internet is freaking out about it.

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