Tesla's stock falls 11% after SEC sues Elon Musk

Tesla's stock tumbled Friday morning after the SEC sued Elon Musk for misleading investors.Musk tweet...

Posted: Sep 28, 2018 2:08 PM
Updated: Sep 28, 2018 2:08 PM

Tesla's stock tumbled Friday morning after the SEC sued Elon Musk for misleading investors.

Musk tweeted on August 7 that he had secured funding to take Tesla private at $420 a share. Typically, stocks match takeover prices that a company publicizes. Investors assume the deal will be completed and the company will eventually be worth the price at which the company says it will be sold.

However, skeptical investors never believed Musk, and the stock never approached anything close to $420 a share. It rose as high as $387.46 on August 7 and tumbled since then.

Their skepticism was for good reason: Musk had never secured the funding, the SEC alleges. He abandoned the plan to go private three weeks after he first tweeted about it.

The stock fell as low as $265 after the bell Thursday, 14% below Tesla's closing price for the day. Including the off-hours plunge, Tesla's stock has plummeted more than 29% since Musk's infamous tweet.

Tesla's falling stock price could come back to haunt the company. Tesla is burning through cash to build expensive plants and cars, but it badly needs that money to pay about $1 billion in debt by February 2019. Most of that would convert to stock if Tesla's price holds above $360 — but that seems unlikely.

If Tesla needs to pay back its debt with cash — and if the company lacks the cash to pay it — Tesla could raise the money by issuing more debt or stock. But that could further deflate its stock price, depressing the amount of capital the company has to spend on new infrastructure to build cars.

Musk has denied that the company faces a cash crunch. He says increased Model 3 sales will generate enough cash to finally make Tesla profitable in the second half of 2018.

The SEC's lawsuit could cause other problems for Tesla.

The agency has asked a federal judge to prevent Musk from serving as an officer or a director of a public company, among other penalties.

That's a serious concern for Tesla, which Musk built from scratch into a multibillion-dollar company. He's the carmaker's chairman and CEO.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 704632

Reported Deaths: 13211
CountyCasesDeaths
Marion961411718
Lake51322943
Allen39040670
Hamilton34368405
St. Joseph33865539
Elkhart27197431
Vanderburgh22050394
Tippecanoe21725212
Johnson17475374
Porter17240298
Hendricks16754310
Clark12663190
Madison12321337
Vigo12172244
Monroe11417166
LaPorte10841204
Delaware10325184
Howard9629211
Kosciusko9098113
Hancock7954139
Bartholomew7867155
Warrick7680155
Floyd7543176
Wayne6887198
Grant6773171
Boone6524100
Morgan6379138
Dubois6074117
Marshall5770108
Dearborn568576
Cass5678102
Henry5569100
Noble539383
Jackson492869
Shelby478295
Lawrence4336118
Gibson427789
Harrison427570
Clinton417753
Montgomery417286
DeKalb407984
Huntington377480
Whitley376339
Miami371765
Knox365789
Steuben363357
Putnam352360
Jasper347546
Wabash347377
Adams337852
Ripley333468
Jefferson312180
White307854
Daviess289399
Wells285581
Decatur278592
Fayette277162
Greene270485
Posey268433
Scott260853
Clay253044
LaGrange252170
Randolph234680
Washington230631
Spencer227531
Jennings224747
Fountain208245
Sullivan207542
Starke202652
Owen191956
Fulton190939
Jay185829
Carroll185620
Perry179736
Orange176753
Rush170624
Vermillion165943
Franklin165635
Tipton160943
Parke144316
Blackford133331
Pike130234
Pulaski113245
Newton103034
Brown99740
Crawford97514
Benton96413
Martin82515
Warren79315
Switzerland7698
Union69710
Ohio55711
Unassigned0408

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1050112

Reported Deaths: 18991
CountyCasesDeaths
Franklin1219281356
Cuyahoga1067232069
Hamilton780741168
Montgomery49976996
Summit45252909
Lucas39984765
Butler37678570
Stark31385895
Lorain24111473
Warren23864293
Mahoning20869583
Lake19963362
Clermont19423229
Delaware18002130
Licking16109207
Fairfield15676197
Trumbull15553460
Medina14839259
Greene14643236
Clark13602293
Wood12733185
Portage12353196
Allen11312229
Richland11025198
Miami10525214
Muskingum8702127
Wayne8556209
Columbiana8535226
Pickaway8429121
Tuscarawas8370240
Marion8365135
Erie7554154
Hancock6694123
Ross6693146
Geauga6532146
Ashtabula6470165
Scioto6286101
Belmont5610158
Union557447
Lawrence5465102
Jefferson5303147
Huron5298114
Darke5268121
Sandusky5171120
Seneca5108120
Washington5073107
Athens500656
Auglaize475184
Mercer471184
Shelby455890
Knox4380108
Madison421559
Putnam420799
Ashland412688
Fulton409167
Defiance400896
Crawford3866101
Brown386055
Logan372876
Preble369898
Clinton360560
Ottawa356578
Highland346359
Williams324974
Champaign319257
Jackson307951
Guernsey306149
Perry289649
Fayette277348
Morrow274639
Hardin264164
Henry263566
Coshocton258857
Holmes253099
Van Wert238862
Gallia233346
Pike232931
Adams227852
Wyandot226953
Hocking208959
Carroll189147
Paulding168638
Meigs141538
Noble132837
Monroe128841
Morgan106623
Harrison105236
Vinton81414
Unassigned02
Fort Wayne
Partly Cloudy
36° wxIcon
Hi: 59° Lo: 33°
Feels Like: 31°
Angola
Cloudy
37° wxIcon
Hi: 57° Lo: 33°
Feels Like: 37°
Huntington
Partly Cloudy
35° wxIcon
Hi: 58° Lo: 32°
Feels Like: 35°
Fort Wayne
Partly Cloudy
36° wxIcon
Hi: 60° Lo: 34°
Feels Like: 31°
Lima
Partly Cloudy
39° wxIcon
Hi: 59° Lo: 35°
Feels Like: 39°
Cloudy skies move in for Saturday. There's a slight chance of rain during the afternoon. Highs will be slightly below average for this time of year.
WFFT Radar
WFFT Temperatures
WFFT National

Community Events