Ex-SEC attorney is 'alarmed' by Elon Musk's lack of remorse over his Tesla private tweet
- Musk's hubris after his now-infamous considering-going-private tweet could come back to haunt him with regulators, says Teresa Goody.
- The Tesla co-founder and CEO abandoned the idea late Friday.
- Musk's Aug. 7 tweet stunned Wall Street, and his actions since seem to have done little to quell concern among investors and regulators.
Elon Musk's hubris after his now-infamous tweet about possibly taking Tesla private could come back to haunt him with regulators, former Securities and Exchange Commission attorney Teresa Goody told CNBC on Monday.
The Tesla co-founder and CEO abandoned the idea late Friday, just weeks after he took to Twitter on Aug. 7, writing he's "considering taking Tesla private at $420 [per share]," adding, "Funding secured."
A little over a week after his original tweet, Musk gave an unapologetic interview to The New York Times. He also said he doesn't plan to stop tweeting.
"What I think the SEC is going to find alarming — as I did when I read the New York Times article, his interview — is the fact the he says, 'Well, I don't regret any of my tweets. Why would I?' Because a lot of people believed you and lost a lot of money," said Goody, formerly an attorney in the Office of the General Counsel at the SEC and currently CEO of The Goody Group consultancy.
The Musk tweet stunned Wall Street, and his actions since, including blog posts and the Times interview, seem to have done little to quell concern among investors and regulators.
Shares of Tesla opened under pressure Monday after a rough few weeks.
"I think it is good that we have clarity, and now this whole going private is kind of now blown out of the water. So there is clarity. And the confusion to the market has now ended," Goody said in a "Squawk Box" interview. "But questions from the SEC are going to continue."
The commission, according to a Times report on Aug. 15, served Tesla with a subpoena, looking into whether Musk violated securities laws by claiming he had funding for the maneuver.
In a late Friday blog post, Musk said, "Given the feedback I've received, it's apparent that most of Tesla's existing shareholders believe we are better off as a public company." He also wrote, "There is also no proven path for most retail investors to own shares if we were private."
Goody said Musk's blog post shows further evidence that "basically the due diligence" was not adequate. Figuring out how much institutional and retail shareholders can retain in a private Tesla are "things you would initially usually discuss before making a public statement about an imminent tender offer," she added.
Tesla was not immediately available to respond to CNBC's request for comment on Goody's interview.
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