Electric Car maker Tesla got some bad news on Thursday when news broke that the Securities and Exchange Commission was suing Tesla CEO Elon Musk over his tweet about taking the company private before any such plans were officially announced.
Not only was the company buffeted by the announcement of the lawsuit, but the company’s shares took a four percent dive upon the news.
Per Daily Caller:
The SEC has spent two months trying to determine if Musk’s promise in August to take Tesla private was designed to hurt the company’s short-sellers, according to an August report from The Wall Street Journal. The billionaire entrepreneur told his Twitter followers in an Aug. 7 post that he had sufficient funding to take the company out of the public domain.
The WSJ reported at the time that the agency is pressing Tesla’s board on how much information the CEO shared ahead of last week’s Twitter announcement. The report came shortly after source told The Financial Times that the Saudi’s Public Investment Fund (PIF) bought shares of the California-based company.
The PIF’s position is worth between $1.7 billion and $2.9 billion at Tesla’s current share price. The stake makes the fund one of Tesla’s eight biggest shareholders. Musk used recent discussions with the Saudi family as the justification for the tweet.
Musk’s belligerent attitude toward short-sellers is probably not helping his case. He engaged in a highly unusual and combative tit-for-tat with reporters on the call in April, which culminated in Musk calling reporters “boneheaded” for asking questions about problems plaguing the electric automaker.
Its all just more evidence of how shady Musk really is. In fact, few of his businesses are stand-along successes and his entire empire is built on government handouts in the form of tax subsidies, outright government grants, and other forms of government funding.
According to Ideapod.com:
Los Angeles based entrepreneur Elon Musk has created a multi-billion-dollar fortune running companies that make electric cars, sell solar panels and launch rockets into space.
And these companies have been built with the help of billions of dollars in government subsidies.
According to data compiled by The Times, Tesla Motors Inc., SolarCity Corp and Space Exploration Technologies Corp. (SpaceX) have together received an estimated $4.9 billion in government support. The numbers shed light on an emerging theme running through Musk’s business empire: a public-private financing model to manage the risk of launching long-shot start-ups.
As Dan Dolev, an analyst at Jefferies Equity Research, said: “He definitely goes where there is government money. That’s a great strategy, but the government will cut you off one day.”
The subsidies are made up by a combination of government incentives, tax breaks, grants, factory construction, discounted loans and environmental credits that Tesla can sell. The total figure of $4.9 billion also includes tax credits and rebates to buyers of solar panels and electric cars.
Without our tax dollars flooding into his bank accounts, Elon Musk is essentially a failed dreamer sitting in his garage.
But if there is one thing he is an expert at, it is finding ways to get billions in free money from, you and me by raiding our taxes.
Follow Warner Todd Huston on Twitter @warnerthuston.
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