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Elon Musk’s Tesla funding wasn’t quite ‘secured’ after all

He says Saudi Arabia has been interested in funding his take-private transaction. That’s different.

Tesla CEO Elon Musk
Tesla CEO Elon Musk
Paul Warner / Getty

In a new blog post today, Tesla CEO Elon Musk attempted to clarify some very pertinent points about what taking the electric car company private would look like. But the unpredictable executive has prompted more questions than he answered.

Specifically, Musk said that when he tweeted his intentions to take the company private last week — and said he had “funding secured” — he said this because a member of the Saudi Arabian sovereign wealth fund “strongly expressed his support for funding a going-private transaction.”

Musk wrote that given the enthusiasm for taking Tesla private and given that the fund has “more than enough capital” to bankroll this sort of a transaction, he left the meeting “with no question” that a deal could be closed, and it would only be a matter of getting the process going.

But that doesn’t exactly mean that the capital needed to take Tesla private — which Musk says wouldn’t be a straightforward leveraged buyout, because it would be funded by equity, not debt — has been “secured.”

Tesla is still a public company, which means it’s subject to the rules and regulations of the U.S. Securities and Exchange Commission. That means words do matter.

While the SEC may not take issue with Musk using Twitter to announce he was considering taking Tesla private, former SEC chairman Harvey Pitt has said that it would be a violation if Musk’s tweet wasn’t entirely accurate. So it matters — greatly — if funding was in fact secured before Musk tweeted that it was.

The SEC declined to comment on whether Musk’s new blog post was a sufficient explanation for his tweet.

But Musk went on to say that it was “premature” to provide a full report of the plan to an independent board committee, as is typical, because he is having more discussions with the Saudi fund, as well as with other investors. This, again, implies that funding hasn’t been entirely secured.

“Another critical point to emphasize is that before anyone is asked to decide on going private, full details of the plan will be provided, including the proposed nature and source of the funding to be used. However, it would be premature to do so now. I continue to have discussions with the Saudi fund, and I also am having discussions with a number of other investors, which is something that I always planned to do since I would like for Tesla to continue to have a broad investor base.”

While the SEC may not have much to say publicly, recent reports indicate the Commission was already looking into Musk’s public announcements of things like manufacturing and sales goals before the take-private tweet. The Commission is also said to have broadened the scope of that inquiry to include whether the “funding secured” statement was intended to be factual, according to Bloomberg.

But it’s not just the SEC that’s looking into the factual nature of Musk’s tweets. Already, two class-action lawsuits have been filed by investors against Tesla and Musk, both of which alleged Musk “materially misled investors” with his tweet last week. These lawsuits, both filed in the Northern District of California, accuse Musk of manipulating the market with false statements that caused investors “to purchase or sell Tesla securities at artificially high or low prices.”

A few hours after Musk’s tweet, the stock jumped to $371 from $358. Trading was halted shortly after. Today, it’s trading around $352 — far short of the $420 mark.

While inquiries into whether Musk misrepresented where the company is in this process continue, this situation is actually a perfect example of why he wants to take Tesla private. Musk has long lamented the pressure of operating a company publicly and last week wrote that taking it private would allow Tesla to focus on meeting its goals instead of meeting Musk’s self-imposed and publicly stated deadlines.

It also means there may be less weight placed on Musk’s tweets.

This article originally appeared on Recode.net.