Tesla (NASDAQ:TSLA) Investigation: SEC Asked About ‘420 Funding Secured’ Tweet
Tesla’s (NASDAQ:TSLA) biggest institutional investor said Wednesday it was questioned by the SEC about Elon Musk’s now-abandoned plans to take the fledgling EV maker private and that the CEO needed help running the company.
“He needs help, and I mean that psychologically as much as practically,” said asset manager Baillie Gifford’s James Anderson, the fund manager of Scottish Mortgage Investment Trust, which owns Tesla shares.
Mr. Anderson told Reuters he talked with Mr. Musk about the idea of bringing in another executive. Analysts have been calling for Tesla to add a COO (chief operating officer) and additional Top management.
Tesla could not immediately be reached to comment.
SEC officials also could not immediately be reached.
The last few months have been chaotic for Tesla and its CEO. While Tesla was wrestling to ramp up production of its mass-market electric M3 sedan, on 7 August Mr. Musk Tweeted that he was considering taking the company private at 420/share and that funding was “secured.”
On the evening of Friday, 24 August, by then facing US Securities and Exchange Commission scrutiny into the factual accuracy of his financing Tweet, Mr. Musk blogged that Tesla would remain public, citing investor resistance.
Mr. Anderson said that he suggested to Mr. Musk his Tweets are “not a great thing” and added that the firm had been talking to the SEC about Mr. Musk’s proposal and financing claims.
The next 2 largest Tesla institutional shareholders, T. Rowe Price Group and Fidelity Investments, both declined to comment on whether they have spoken with the SEC about Tesla.
Mr. Anderson said he had spoken with Mr. Musk twice and was arranging to speak with the company’s board.
“We think there is a decent chance that they can prove to be an extremely profitable, competitively advantaged company which will produce high returns,” Mr. Anderson said.
Tesla may need to raise more capital and would have a better idea of its needs in the next few months, Mr. Anderson said, adding he would support such a move.
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