Some legal authorities are commenting that Elon Musks public mention of taking Tesla private may have violated Securities and Exchange Commission Rule 14e-8. This prohibits publicly traded companies from announcing plans to buy or sell securities if executives don’t intend to follow through within a reasonable time. The purpose of the rule is to prevent manipulation of the stock price. Musk tweeted “Am considering taking Tesla private at $420. Funding secured.” This tweet resulted in a stock price spike of Tesla to $387.49 closing price. At $420 per share, this would mean Tesla would need to come up with $71 billion to take the company private. I don’t think there is a violation despite the unusual nature of Musks tweet.
Here is the language of the regulation at issue
Sec 240.14e-8 Prohibited conduct in connection with pre-commencement communications.