Things are looking pretty grim for Elon Musk and, implicitly, for Tesla’s stock. The US Securities and Exchange Commission (SEC) filed a lawsuit on Thursday, accusing Musk of making “false and misleading statements” about taking Tesla private with a share price of $420.
“Musk’s statements were premised on a long series of baseless assumptions and were contrary to facts that Musk knew,” said the SEC.
“In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source,” continue the accusations. All of them refer to a series of tweets Elon Musk wrote in August, saying he plans to make Tesla a private company with $420 as a stock value.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
“We allege that Musk had arrived at the price of $420 by assuming a 20 percent premium over Tesla’s then-existing share price, and rounding up to $420 because of the significance of that number in marijuana culture and his belief that his girlfriend would be amused by it,” said the SEC.
“In truth and in fact, Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source,” the SEC said in the complaint.
“I have always taken action in the best interests of truth, transparency, and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way,” said Musk in a statement for Business Insider.
However, this comes on the back of a series of stunts by Elon Musk. First there was the $420 joke, then the CEO had a spat with singer Azalea Banks and, eventually, his relationship with Grimes fizzled. Clearly, she was not impressed by his Tweets, and nor was the SEC.
You can also add to the list of people gunning for Elon Musk the Department of Justice, which recently launched a probe, the British cave diver who sued the head of Tesla for calling him a “pedo,” and even Tesla’s board members, who are looking for a new CEO.