Members of the board of directors for Elon Musk’s Tesla were reportedly “totally blindsided” by the CEO’s tweets suggesting that he had funding secured to take the company private.
The New York Times reports that Tesla board members were shocked by Musk’s recent tweets about taking the company private once stock price reached $420 a share. Musk further claimed that he had the “funding secured” to take the company private, an act that would cost up to $70 billion.
According to the Times report, Musk’s decision to announce his plans via Twitter “had not been cleared ahead of time with the company’s board,” adding that “some members of the board had been totally blindsided by Mr. Musk’s decision to air his plan on Twitter.”
Two unnamed sources familiar with the issue told the Times that Musk told an informal adviser that he posted to Twitter “impulsively,” and was “not the kind of person who could hold things in.” Musk allegedly admitted that he “was angry at the company’s critics.”
The SEC is reportedly looking into Musk’s tweets about taking the company private, if Musk tweeted that he had “funding secured” for the process without actually having the money to back it up, it could be argued that the CEO was attempting to inflate Tesla stock prices with the tweet which could spell disaster for Musk.
But it also appears that tweeting such market-influencing details may not be entirely in line with SEC guidelines due to Musk’s history of blocking users. Twitter has been a legitimate channel for investor communication since 2013 when the Securities and Exchange Commission (SEC) stated that the social media platform as a valid disclosure method as long as companies warned investors prior to posting on the platform.
Musk has blocked at least three dozen people including investors, journalists, and famous short-seller Mark Spiegel, who has been vocally critical of Tesla. “If he blocks anyone who says anything negative about Tesla — you say ‘I don’t like your cars,’ you’re blocked — and he really has a pattern of blocking a lot of people, I do think that raises particular questions about whether he has turned that open channel back into a selective channel,” Liftik stated.