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Tesla shares tumble after Elon Musk interview sparks fresh fears

20 August, 2018, 20:14 | Author: Sara Gill

The 47-year-old said he sometimes did not leave the Tesla factory for three or four days straight and he had not taken off more than a week at a time since he was sick with malaria in 2001.

The Securities and Exchange Commission is reportedly investigating an August 7 tweet by Musk in which he proposed taking the electric vehicle maker private and said he had secured funding for the transaction.

Elon Musk's biggest problem is painfully obvious to anyone who read his bombshell emotional interview with The New York Times on Thursday.

The Times report said he frequently takes Ambien to get to sleep after long workdays and that Tesla's board has become concerned about his use of the drug.

But a tweet Mr Musk fired off last week reportedly made him and the directors the targets of securities regulators, and may force the board to act. "It is often a choice of no sleep or Ambien", he told the newspaper.

Tesla shares fell this week on reports by Fox Business and the New York Times that the US Securities and Exchange Commission has subpoenaed Musk to talk about the tweet. Investors also were anxious about reports that regulators were pressuring Tesla's directors for details about how much information he shared with them.

Besides the SEC probe, Musk is facing a reputation stain as a result of his readiness to use Saudi oil money to take Tesla private.

Nearly a week later, the CEO said the basis for that statement were conversations with Saudi Arabia's Public Investment Fund, which first expressed interest in helping take the company private in early 2017.

But while Tesla is always on the lookout for senior talent, no official search for a COO is now underway, said the person familiar with the board's thinking.


'Is there someone who can do the job better?

The Times quoted Musk as saying that his physical health has been "not that great" due to Tesla's turmoil. "We know that the safest thing for Musk right now is a medical leave".

He also told the Times that the worst is over "from a Tesla operational standpoint" but added, "from a personal pain standpoint, the worst is yet to come". Shortly after that Tesla stock surged almost 11 percent from $342 to $379 per share.

It is illegal for a director or officer of a public company "to knowingly or recklessly make material misstatements about that company", said John Coates, a professor at Harvard Law School who teaches mergers and acquisitions.

The market response to the Times interview, however, suggests that Tesla without Musk might be a very different company.

The agency is also reportedly looking into whether the tweet was meant to hurt those betting against Tesla, according to The Wall Street Journal, citing a source familiar with the matter.

The company said the board formed a special committee to evaluate proposals to take the company private. "Others could not be corroborated", Tesla said in the statement.

Musk accurately predicted the pinch from Tesla's shorts isn't over yet.

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