Tesla sinks after report the SEC has issued subpoenas about Elon Musk’s 'funding secured' tweet

Shares of Tesla sank as much as 4% in trading Wednesday as the flurry of news surrounding Elon Musk’s plan to take his electric car maker private continued.

Fox Business reported Wednesday that the US’ top equities regulator, the Securities and Exchange Commission, had issues subpoenas to Tesla regarding its privatization plans and Musk’s “funding secured” tweet. Reporter Charles Gasparino said the investigation – which was first reported on by the Wall Street Journal last week and confirmed by Bloomberg – had reached “formal” stages.

Business Insider has not been able to confirm the Fox Business report. Both Tesla and the SEC declined to comment on the report.

Further complicating Tesla’s situation were subsequent tweets from Musk, saying he was excited to work with Goldman Sachs and the private equity firm Silver Lake on the transaction. However, Bloomberg reported that no formal agreement had been signed between the firms as of Tuesday. Goldman Sachs declined to comment when asked by Business Insider if it had been hired by Musk or Tesla.

Securities lawyers have told Business Insider that Musk’s tweet, followed up with an explanation that funding was not actually secured at the time of the announcement, could leave Tesla and Musk liable to lawsuits from the SEC and shareholders.

Tesla initially skyrocketed to a new record high of $US389.57 shortly after the announcement last week, but has since given up all of its gains and is now trading around $US333 – 26% below the $US420 price laid out by Musk.

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