Tesla founder Elon Musk told federal investigators that one of the reasons why he suggested taking the company private at $420 per share was because of the number’s significance in marijuana culture.
Musk spent a day at the end of August answering questions from the Securities and Exchange Commission agency at its office in California. The SEC asked him why he tweeted in August a plan to take Tesla private at $420. His answer was simple: It’s a reference to weed.
“This calculation resulted in a price of $419, and Musk stated that he rounded the price up to $420 because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend ‘would find it funny,’ which admittedly is not a great reason to pick a price,” according to the SEC complaint.
His testimony led the SEC to believe it had an easy case showing that an Aug. 7 tweet from the mercurial Tesla head about taking the company private had violated securities laws, a source told The Wall Street Journal Friday.
Investigators believed Musk’s tweet was a subtle shot at short sellers that likely negatively affected new investors who were unaware he had not secured the funding necessary to remove Tesla from the stock exchange. (RELATED: Elon Musk Agrees To Step Down From Tesla As Chairman In SEC Settlement)
Musk and his lawyers had initially hammered out a deal Thursday with the SEC requiring him to step down as CEO and paying a penalty, but Musk backed out at the last moment. The agency was then forced to quickly cobble together a lawsuit against Tesla for fraud late Friday.
He finally agreed Saturday to pay a $40 million fine and step down as chairman for three years, but he does get to retain his position as CEO. Musk, who owns nearly 20 percent of the company, neither admitted nor denied the allegations the SEC leveled against him.
Musk riled up some controversy when he smoked weed during a Sept. 7 appearance on comedian Joe Rogan’s podcast. He discussed everything from his social media behavior to concerns about artificial intelligence on “The Joe Rogan Experience,” a popular podcast that live-streams on YouTube.
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