Tesla’s (TSLA) stock just took a tumble after a report came out about the SEC issuing subpoenas at the automaker over Elon Musk’s claims that the funding for the take-private move is “secured”.

The move has been surrounded by controversy ever since Musk made the announcement on Twitter that he has “funding secured” for taking Tesla private at $420 per share.

The comment sparked a lawsuit against Musk and an alleged SEC probe.

Earlier this week, Musk explained that his comment came from a meeting with the leaders of the Saudi Arabian wealth sovereign fund:

“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.”

The basis of the lawsuit and presumably of the SEC probe question is if that would justify claiming that the funding is “secured”.

Now Fox Business reports that the SEC is ramping up its investigation into the matter:

We reached out to Tesla about a comment on the claim, but a representative for the company declined to comment.

Yesterday, Tesla’s board moved forward with a special committee to evaluate Musk’s take-private proposal, which he is expected to make official soon.

Electrek’s Take

As always when I comment on this stuff, please keep in mind that I am not a market regulation expert and therefore, you should take what I say about this with a grain of salt.

When the alleged SEC probe was first revealed, it sounded like it was more about Musk’s disclosure through Twitter and my understanding is that the SEC has already cleared Musk for a similar situation in the past.

It boils down to disseminating information and there’s no doubt that Musk’s Twitter is very efficient at disseminating information.

Moments after he tweets something, several news outlets post articles about it – ourselves included.

But now it sounds like it’s more about whether Musk can really claim that the funding is secured because of his meeting with the Saudis.

Probably only the Saudi execs in that meeting and Musk know the exact answer, which means that it’s going to be hard to prove.

Now that the Saudi sovereign fund is a Tesla shareholder, I doubt that they would try to get Musk or Tesla into trouble unless you subscribe to the conspiracy theory that the fund is trying to sabotage the electric automaker.

I doubt the probe will lead to anything, but that’s just my opinion.

What do you think? Let us know in the comment section below.

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