The Securities and Exchange Commission is looking into whether Tesla CEO Elon Musk tweeted about taking the company private in order to hurt those who were shorting Tesla’s stock, according to a report in the Wall Street Journal Thursday.
The agency is pressing Tesla’s board for details on how much information he shared with them prior to announcing his plans on Twitter, the report said, citing a source. Two key questions are what Musk may have told directors before he spoke publicly about possibly taking Tesla private and when he spoke to them.
Last week, short-sellers betting against Tesla lost big after the CEO tweeted about taking the company private.
Musk said on Twitter last week he was “considering taking Tesla private at $420 a share. Funding secured.”
Tesla shares rose 11 percent following Musk’s tweet Tuesday, meaning short sellers lost about $1.3 billion in mark-to-market losses, according to estimates from financial technology and analytics firm S3 Partners.
The data firm said roughly 35 million Tesla shares are held short and the cumulative mark-to-market paper loss for those betting against the automaker as of last week was roughly $3 billion for this year.
— CNBC’s Kate Rooney contributed to this report.
This story is developing. Please check back for updates.
