Tesla has had quite an eventful month with CEO Elon Musk tweeting that he is considering taking the company private and that he had secured funding.
The SEC has subpoenaed the company after the tweet as its first step in a formal inquiry. Many on Wall Street were skeptical on whether or not he did indeed have funding.
Tesla shares dropped even further on Friday about 9%, after Musk revealed to the New York Times that the stress of his job is getting to him.
Musk admitted that the stress of running Tesla has affected his health and that he is working up to 120 hours a week and sometimes takes Ambien to sleep. He said the year has been an “excruciating year.” He said, “This past year has been the most difficult and painful year of my career. It was excruciating.”
Musk had tweeted last June, “A little red wine, vintage record, some Ambien … and magic!”
According to reports from earlier, the SEC had before intensified its scrutiny over Tesla after Musk’s tweet.
Musk had said that the Saudi Arabia sovereign wealth fund had express interest and wrote in a blog post that he had been in discussions with the fund since early last year about a major investment that would help Tesla go private.
According to the CEO, at a July 31 meeting with the managing director of Saudi Arabia’s sovereign wealth fund, he had been given confidence the fund would back a deal to take Tesla private.
“During the meeting, the Managing Director of the fund expressed regret that I had not moved forward previously on a going private transaction with them, and he strongly expressed his support for funding a going private transaction for Tesla at this time,” Musk explained. “I understood from him that no other decision makers were needed and that they were eager to proceed.
“I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving. This is why I referred to ‘funding secured’ in the August 7th announcement.”
Musk’s tweet may have violated an SEC rule that stipulates that public statements made by a company executive must be true.
“I can’t imagine that the enforcement division hasn’t opened a file, that they are not calling his counsel or him and saying ‘we would like whatever papers you have about this, if you have written anything down, if you have talked to lenders, if you have materials about that we would like to see them,'” said Tom Gorman, a former senior enforcement attorney with the SEC and a partner at Dorsey & Whitney in Washington, D.C.
“‘And right after we have finished seeing all that stuff, we would like to talk to you.'”
Tesla has issued a statement and said, “We would like to make it clear that Elon’s commitment and dedication to Tesla is obvious.”
The SEC is investigating whether or not Musk’s tweet was true. According to analysts, it is estimated that it would require $25 billion to $50 billion to take the electric vehicle maker private.