On August 7, 2018, Musk posted on Twitter: "Am considering taking Tesla private at $420. Funding secured." He followed up with additional tweets suggesting a deal was close and that shareholder support was "uncertain" but that he expected to proceed.[1][2] Tesla shares jumped sharply on the news, and trading was briefly halted.[2]
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At a Glance
On August 7, 2018, Elon Musk tweeted that he was considering taking Tesla private at $420 per share and that funding was 'secured.' The U.S. Securities and Exchange Commission alleged the statement was false and misleading, since Musk had only had preliminary talks with Saudi Arabia's sovereign wealth fund and had not actually secured committed financing. The SEC sued Musk for securities fraud in September 2018; Musk and Tesla settled the same month, each agreeing to pay a $20 million civil penalty, and Musk agreed to step down as Tesla's board chairman for at least three years while remaining CEO. The settlement also required a securities lawyer to review certain of Musk's tweets in advance, a provision Musk has since challenged repeatedly and unsuccessfully in court.
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The Tweet
03
What Actually Happened Behind the Tweet
The SEC's subsequent complaint alleged that Musk had held only preliminary discussions with representatives of Saudi Arabia's Public Investment Fund about a potential going-private transaction and had not, in fact, secured firm financing commitments, price terms, or the support of Tesla's board at the time he tweeted.[2][3] No going-private transaction was ever announced or completed, and Tesla remained a public company.[3]
04
The SEC Lawsuit and Settlement
The SEC sued Musk for securities fraud on September 27, 2018, seeking to bar him from serving as an officer or director of a public company.[3][4] Musk and the SEC reached a settlement within days, announced September 29, 2018, under which Musk and Tesla each agreed to pay a $20 million civil penalty (a combined $40 million), and Musk agreed to step down as Tesla's board chairman for at least three years, though he remained CEO throughout.[3][4] Neither Musk nor Tesla admitted or denied the SEC's allegations as part of the settlement.[4]
05
The Tweet Pre-Approval Requirement and Later Fights
As part of the settlement, Tesla was required to implement additional oversight of Musk's public communications, including having a securities lawyer review in advance any of his tweets containing information that could be material to Tesla's stock price.[4][5] Musk has since repeatedly challenged this requirement in court, including asking the U.S. Supreme Court in 2023 to review his ability to exit the consent decree, arguing it violated his free-speech rights; the Supreme Court and lower courts have declined to overturn the settlement terms.[5]
The episode remains one of the most frequently cited examples of the regulatory and governance risks tied to Musk's active, unfiltered use of social media as a public-company CEO.[5]
06
References
- 1U.S. Securities and Exchange Commission, Complaint against Elon Musk and settlement press release (September 2018), accessed on September 26, 2026.
- 2TechCrunch, Elon Musk's settlement with the SEC approved by judge, sending shares higher, accessed on September 26, 2026.
- 3CNBC, SEC rebuffs Elon Musk's attempt to get out of 'funding secured' settlement, accessed on September 26, 2026.
- 4A&O Shearman, Tesla, Musk Settle Tweet-Related SEC Charges, accessed on September 26, 2026.
- 5Forbes, Elon Musk Asks Supreme Court To Toss Out SEC Penalties Over 'Funding Secured' Tweet, accessed on September 26, 2026.
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Frequently Asked Questions
What did Elon Musk's 'funding secured' tweet say?
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On August 7, 2018, he tweeted: 'Am considering taking Tesla private at $420. Funding secured,' implying a take-private deal was imminent and financially committed.
Was the funding actually secured?
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No. The SEC alleged Musk had only had preliminary talks with Saudi Arabia's sovereign wealth fund and had not secured firm financing commitments or board approval for a deal.
What was the SEC settlement's penalty?
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Musk and Tesla each paid a $20 million civil penalty (a combined $40 million), and Musk agreed to step down as Tesla's board chairman for at least three years while remaining CEO.
Does someone review Elon Musk's tweets before he posts them?
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The 2018 settlement required a securities lawyer to review in advance any of his tweets containing information potentially material to Tesla's stock price, a requirement Musk has since challenged in court without success.
Was Tesla ever taken private?
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No. No going-private transaction was ever announced or completed following the August 2018 tweet; Tesla has remained a publicly traded company.