SEC Sues Elon Musk for Fraud Over $420 Tesla Stock Price Tweet
The SEC is suing Elon Musk for fraud over his $420 Tesla stock price tweet, claiming it was intended to amuse his girlfriend, Grimes
Key Points
- 1SEC sues Elon Musk for fraud over misleading Tesla tweet
- 2Musk's $420 stock price aimed to amuse girlfriend, Grimes
- 3The SEC emphasizes accountability despite celebrity status
- 4Musk calculated $420 based on a 20% stock premium
- 5Musk expressed disappointment over the SEC's lawsuit
Elon Musk, the CEO of Tesla, is facing a lawsuit from the Securities and Exchange Commission (SEC) over a tweet regarding taking Tesla private at a $420 stock price. The SEC alleges that Musk's claims of having secured funding were misleading, and the choice of the $420 figure was intended to amuse his girlfriend, Claire Boucher, known as Grimes, due to its association with marijuana culture
The controversy began on August 7, when Musk tweeted his consideration of taking Tesla private at $420 per share, assuring that funding was secured. This led to a series of tweets that the SEC claims were misleading to investors. Musk reportedly calculated the price based on a 20% premium over the closing stock price, rounding it to $420 for its cultural significance, which he believed would entertain Grimes
The SEC is not amused by Musk's actions, emphasizing that no individual, regardless of their celebrity status, is exempt from federal securities laws. Stephanie Avakian, co-director of the SEC's Division of Enforcement, stated that the case underscores the importance of accountability. Musk, who recently appeared on a podcast smoking marijuana, expressed his disappointment over the SEC's decision to pursue legal action