The department did not consider these reasons to be sufficiently substantiated.
In a lawsuit filed by the US Securities Commission (SEC) against Elon Musk , it was stated that the entrepreneur had set a price of $ 420 per share to privatize Tesla, because he had recently learned about its significance in a marijuana culture and decided that his girlfriend would find this amusing.
In its statement, the SEC pointed out that, according to the head of Tesla, he calculated the price at $ 420 per share based on a 20% reward to the value of shares during the closing of the markets that day. Musk supposedly thought that 20% – the “standard premium”, which is appointed for the privatization of companies.
These calculations led to a price of $ 419 per share and Musk said that he rounded the price to $ 420 because he recently learned about the value of the number in a marijuana culture and thought that his girlfriend “will find it amusing, although in fact this is not the best reason for choice of price “.
The suit of the department does not explain where it got the explanation from Musk, but in August the regulator requested information about the businessman’s tweet. In late August, rapper Asilia Banks described how she was at home with Ilona Musk and Grimes, when he published a tweet about the privatization of Tesla. She claimed that he really chose the price because of marijuana, and Grimes actually laughed at it.
The entrepreneur said that he was not familiar with Banks and had never seen her. However, in an interview with The New York Times, he confirmed that that morning he was with Grimes in his home in Los Angeles, as claimed by the rapper.
Publicly, Musk did not confirm or deny rumors about the connection of the price with marijuana and explained the choice of the figure solely by a 20% reward for current shareholders. However, on September 7, he smoked marijuana during an interview with comedian Joe Rogan and said that he does it infrequently due to lack of effect.
On September 27, the Securities Commission officially accused Musk of fraud due to a tweet about the privatization of Tesla, which triggered a violent market reaction. If the suit is satisfied, the entrepreneur will lose the opportunity to hold executive positions in any company whose shares are traded on the stock exchange.