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| Tesla's troubles continue thanks to Elon Musk's tweet |
The Securities and Exchange Commission has summoned Tesla over Elon Musk's 2018 tweets about the company's privatization.
News of the November 16, 2021 subpoena highlighted the rift between Elon Musk and the United States. The Securities and Exchange Commission (SEC), which has been in place for more than four years.
Musk tweeted on August 7, 2018, saying he had secured funding to make the company private for $420 a share. Tesla has been a public company since 2010.
Musk said on Twitter that he secured funding to complete the deal and fire any shareholders who don't want to continue working with the company.
And he posted tweets as trading continued in the afternoon and the company's share price rose.
The Securities and Exchange Commission has launched an investigation. The investigation revealed that Musk held several meetings with the sovereign wealth fund of the Kingdom of Saudi Arabia.
However, Musk never considered going private with potential funding sources of $420 per share.
Nor has it been checked whether all existing investors are allowed to stay with Tesla as a private company. He did not confirm Tesla investors' support for a potential deal.
A year later, Tesla and the Securities and Exchange Commission agreed that Musk's tweets about the company should come under more scrutiny.
As part of the settlement, the company's attorneys must pre-approval of Musk's tweets about the company's financial health, sales or shipments, and other specific topics.
In February 2019, the Securities and Exchange Commission ordered a federal judge to dismiss an inaccurate tweet by Musk. She said the tweet violated the terms of the agreement.
Musk claims that the Securities and Exchange Commission is trying to seize power unconstitutionally. The agency said the company's chief executive had broken the rules.
Tesla's problems come days after Musk's tweet
The latest subpoena comes just over a week after Musk launched a poll asking his supporters whether they should sell their 10% stake in Tesla to pay more taxes.
The automaker's shares fell 16% over the next two sessions. Musk has been openly critical of proposals by some of the richest Americans to tax unrealized gains on publicly traded assets.
According to the proposal, if the value of the asset increases, the person will have to pay tax on the unrealized gain even if the person does not sell the asset.
This closes a tax loophole that allows billionaires to defer capital gains taxes indefinitely. And they have the ability to keep borrowing to make up for that wealth.
Tesla did not specify the nature of the agency's investigation. However, she said the agency is looking for information on how the governance process for the revised agreement will comply.
The company terminated its PR department in 2019 and has not responded to media inquiries since then.