BCN-07-08 Tesla confirms criminal probe into Musk talk of going private

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Tesla confirms criminal probe into Musk talk of going private

SAN FRANCISCO, Sept 19, 2018 (BSS/AFP) – Tesla confirmed Tuesday that US
Justice Department officials were looking into possible criminal aspects of a
seemingly spontaneous, and later aborted, announcement by chief executive
Elon Musk on taking the electric automaker private.

Shares skidded as word spread of a criminal investigation triggered by
Musk’s Twitter comments. Tesla shares ended the formal Nasdaq trading day
down 3.35 percent to $284.96.

Tesla said it was confident the matter would be quickly resolved with the
Justice Department.

“Last month, following Elon’s announcement that he was considering taking
the company private, Tesla received a voluntary request for documents from
the DOJ and has been cooperative in responding to it,” the California-based
company said.

“We have not received a subpoena, a request for testimony, or any other
formal process.”
A lawsuit filed earlier this month accuses Musk of trying to “burn” short-
sellers by falsely tweeting that funding had been secured to take the
electric carmaker private.

Musk surprised markets on August 7 by announcing on Twitter he wanted to
take Tesla private at $420 a share, causing the stock price to jump. Short-
sellers bet on share prices dropping.

Normally such a major announcement — taking a huge company private —
would be explained in detail beforehand to regulators.

Musk has since backed off talk of going private, saying the company will
continue to be publicly traded.

US market regulators are also scrutinizing what happened.

A number of executives have left Tesla of late. The company said last week
that finance executive Justin McAnear is leaving as Tesla strives to become
profitable by the end of the year.

Word that McAnear was heading for the off-ramp followed chief accounting
officer Dave Morton’s departure after just a month on the job, citing the
company’s frenetic pace.

Morton’s brief tenure with the company coincided with the aborted go-
private push.
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– Erratic behavior –

Musk has also been criticized for other unorthodox behavior, including
appearing on a podcast smoking marijuana and giving a tell-all interview to
The New York Times in which he admitted to feeling overwhelmed and unable to
sleep over Tesla’s ambitious electric car production targets.

On Monday, British caver Vernon Unsworth filed a defamation suit against
Musk for calling him a “pedo guy” and a “child rapist” on Twitter in a
bizarre spat over the cave rescue in Thailand of a boys’ soccer team and
their coach.

Despite the myriad controversies, Musk continues to have a strong
following with many investors and Tesla’s market capitalization remains well
above that of Ford and only slightly behind that of General Motors.

The latest news on Tesla comes as it seeks to ramp up production of its
Model 3, the mass-market vehicle seen as key to the automaker’s future.

Tesla had struggled to overcome production bottlenecks in recent months
for the Model 3, but now faces other logistical issues, according to Musk.

“Service & parts supply in general will be the top Tesla priority after we
get through the insane car delivery logistics of the next few weeks,” Musk
tweeted.

Musk is also CEO of SpaceX, the private space exploration firm that
announced Monday that Japanese billionaire and online fashion tycoon Yusaku
Maezawa will be the first man to fly around the Moon on a monster SpaceX
rocket.

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