Last August, Elon Musk made a joke on Twitter, writing, “Am considering taking Tesla private at $420. Funding secured.” 420, of course, is a number that has significance in cannabis culture, and while Musk presumably thought his tweet was just silly and inconsequential, that hasn’t turned out to be true. Musk is being sued by the Securities Exchange Commission (SEC) because the tweet contains “false and misleading statements,” since he “never discussed a going-private transaction at $420 per share with any potential funding source.” Now, Grimes, who Musk was dating at the time, and Azaelia Banks might be getting involved in the legal proceedings.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
Tesla investors are seeking to subpoena Grimes and Banks, according to Bloomberg, because the two “may have first-hand knowledge about what Musk was thinking” when he posted the tweet, and they attest that “it’s not unreasonable to subpoena Boucher and Banks to ensure the preservation of anything in writing that might be relevant to the lawsuit.” Around the time of the tweet, Banks and Grimes spent time together collaborating on music at Musk’s home. Musk’s attorney Dean Kristy has offered a response, saying, “It is readily apparent that this is more of an effort to sensationalize these proceedings than a legitimate attempt to preserve evidence.”
The lawsuit was filed on September 27, and Musk said at the time, “I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way.” Around the same time, Steven Peikin, co-director of enforcement at the SEC, said, “We allege that Musk had arrived at the price of $420 by assuming a 20 percent premium of what Tesla’s then existing share price [was], and then rounding up to $420 because of the significance of that number in marijuana culture, and his belief that his girlfriend would be amused by it.”
The month after Musk posted the tweet, he was forced to step down as a Tesla chairman (although he remains CEO) and pay a $20 million fine.
