Berkshire Hathaway Chairman and CEO Warren Buffett has a word of advice for Elon Musk, the embattled Tesla CEO who’s currently under investigation by the U.S. Securities and Exchange Commission (SEC): If you misspeak, correct yourself immediately.
Musk came under fire in early August when he unexpectedly sent out a tweet saying he was considering taking the electric-car maker private, and had already secured the funding. Shares soared on the news, and although briefly halted by the Nasdaq, resumed trading, eventually rising more than 10 percent.
“If you’ve got a stock that’s trading like crazy, you come on three minutes later and say, ‘I misspoke when I said funding secured. I really meant to say I think I can get funding,’” Buffett said on Thursday -- the legendary investor’s 88th birthday -- during an interview with FOX Business’ Liz Claman.
Although the eccentric billionaire later announced that Tesla would remain a publicly traded company to appease shareholders, that tweet spurred the SEC to launch an investigation into the veracity of Musk’s statement. The San Francisco office of the SEC has sent subpoenas to Tesla regarding its privatization plans to determine whether Musk intentionally misled investors.
Although Tesla's board did not confirm any funding plans at the time, Musk outlined additional details in a blog post, noting he was all but certain to have landed the investment from the Saudi sovereign fund in July.
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And in the most-recent statement, Musk wrote that his belief was reinforced during this process that there is “more than enough funding” to take Tesla private. Still, that doesn't confirm his statement, considered "material" and likely problematic for the SEC.
Tesla hired two law firms in response to the investigation: Paul, Weiss, Rifkind, Wharton & Garrison to help deal with the SEC, and Latham & Watkins to advise on privatization.