Tesla investor says U.S. SEC asked it about 'funding secured' tweet
(Adds comments by investors, background, byline)
By Simon Jessop
LONDON, Sept 12 (Reuters) - Tesla Inc's biggest
institutional investor said on Wednesday it was questioned by
U.S. securities regulators about Elon Musk's now-abandoned plans
to take the electric carmaker private and that the chief
executive needed help running the company.
"He needs help, and I mean that psychologically as much as
practically," said asset manager Baillie Gifford's James
Anderson, the fund manager of Scottish Mortgage Investment
Trust, which owns Tesla shares.
Anderson told Reuters he has talked with Musk about the idea
of bringing in another executive. Analysts have been calling for
Tesla to add a chief operating officer or other new blood to top
Tesla, whose shares were up 3.1 percent in afternoon trading
after earlier being up 4.5 percent, could not immediately be
reached to comment. SEC officials also could not immediately be
The last few months have been tumultuous and chaotic for
Tesla and its eclectic CEO. While Tesla was wrestling to ramp up
production of its mass-market electric Model 3 sedan, on Aug. 7
Musk tweeted that he was considering taking the company private
at $420 per share and that funding was "secured."
On the evening of Aug. 24, a Friday, Musk, by then facing
U.S. Securities and Exchange Commission scrutiny into the
factual accuracy of his financing tweet, blogged that Tesla
would remain public, citing investor resistance.
Musk was "getting there" on the idea of accepting more help
in running the company, Anderson said.
Anderson said that he had suggested to Musk his tweets are
"not a great thing" and added that the firm had been talking to
the SEC about Musk's proposal and financing claims.
"I don’t know what they’ll do with him, but there’s no
implication that we’ve done anything wrong," Anderson said in an
interview at the firm's London office. "I think quite naturally
they wanted to know whether major shareholders had any lead
indication or knowledge of the tweet about ‘funding secured.’"
The next two largest Tesla institutional shareholders, T.
Rowe Price Group and Fidelity Investments, both
declined to comment on whether they have spoken with the SEC
Anderson said he had spoken with Musk twice and was
arranging to speak with the company's board.
Anderson added that the media coverage around the
going-private comments has not shaken his belief in Tesla or its
"We think there is a decent chance that they can prove to be
an extremely profitable, competitively advantaged company which
will produce high returns," Anderson said.
Musk has said that Tesla should become profitable in the
second half of the year.
Tesla may need to raise more capital and would have a better
idea of its needs in the next few months, Anderson said, adding
he would support such a move.
(Reporting by Simon Jessop, Additional reporting by Nick Carey
in Detroit, Ross Kerber in Boston and Katanga Johnson in
Washington, Writing by Ben Klayman in Detroit; Editing by
First Published: 2018-09-12 19:51:26
Updated 2018-09-12 20:40:27
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