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Elon Musk Slams ‘Shameless Puppets’ At SEC As New Texts Reveal Feud Around ‘Funding Secured’ Tweet Saga

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Tesla billionaire Elon Musk railed against regulators Monday morning after a court filing unearthed dozens of text messages between him and a Saudi investor discussing a deal to take the electric carmaker private—fanning the flames of a four-year-old spat that forced Musk to step down as Tesla chairman and pay $40 million in penalties for claiming deal funding had been “secured” despite lingering uncertainty.

Key Facts

On Twitter Monday morning, Musk claimed he only tweeted in August 2018 that funding for a deal to take Tesla private was secured because the head of Saudi Arabia’s sovereign wealth fund, Yasir Al-Rumayyan, had “committed unequivocally” to join him in the venture.

Musk’s remarks came in response to a Friday court filing outlining a series of texts between him and Al-Rumayyan at the time, in which the Tesla chief pressed the investor to refute reports that the Saudi Public Investment Fund had no interest in acquiring Tesla, saying he was “deeply offended” by the “outrageous” claims.

“Let’s see the numbers and get our people to meet and discuss,” Al-Rumayyan responded after a number of angry texts from Musk, who told the investor, “We cannot work together,” because a Bloomberg article claiming the fund was in talks to invest in the Tesla buyout deal was “weak sauce” and did not reflect the interest Al-Rumayyan expressed in the deal.

The back-and-forth text exchange erupted just days after Musk touted the deal with a “funding secured” tweet, which caught the eye of regulators and claimed a purchase price of $420 per share—a nearly 20% premium to Tesla’s stock price at the time; shares surged more than 7% on the day of Musk’s tweet.

In September 2018, the Securities and Exchange Commission settled fraud charges, with Musk, alleging he had not discussed specific deal terms, including price, with any potential financing partners and that his statements about the possible transaction lacked an adequate basis in fact.

The SEC and Saudi Arabia’s Public Investment Fund did not immediately respond to Forbes’ requests for comment.

Chief Critic

“The San Francisco office of the SEC were shameless puppets of Wall [Street] short-seller sharks, while doing nothing to protect actual shareholders,” Musk said Monday. “That is why I lost all respect for them.”

Key Background

Musk’s complicated history with the SEC has reared its way into his latest business foray, a $43 billion takeover of social media giant Twitter. In a filing on April 14, Musk unveiled an offer to buy 100% of Twitter at $54.20 per share in cash and then take it private. Spectators quickly took note of the peculiar share price and its resemblance to the $420 per share offer for Tesla. In their September 2018 settlement, Musk and the SEC agreed the billionaire would step down as Tesla chair and pay a $20 million penalty to harmed investors. Tesla was also required to pay a $20 million fine.

Tangent

In its complaint, the SEC notes Musk calculated a $419 price per share for Tesla based on a 20% premium at the time (because he thought 20% was a “standard premium”) and that he rounded it up to $420 because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend “would find it funny, which admittedly is not a great reason to pick a price.”

Big Number

$265 billion. That’s how much Musk is worth, according to Forbes.

Further Reading

Twitter Poised To Accept Elon Musk’s Acquisition Offer, Reports Say (Forbes)

Elon Musk Has Secured $46.5 Billion In Financing For Twitter Bid, Considers Tender Offer (Forbes)

Elon Musk Wants To Buy Twitter And Take It Private, SEC Filing Reveals (Forbes)