Later that day, the SEC held a press conference where co-director of enforcement Steven Peikin spoke specifically to reference the significance of Musk's chosen share buyback number.
The Securities and Exchange Commission sued Elon Musk on Thursday for making "false and misleading" statements to investors in an August 7 tweet that said he had secured funding to take Tesla (TSLA) private at $420 a share.
The latest slump came after the Securities and Exchange Commission (SEC) filed a suit in NY accusing Musk of fraud. Musk told the SEC that the lead representative of the fund told him he would be fine with reasonable terms for a go-private deal.
Analyst notes said the SEC's move would likely increase the costs for Tesla to raise capital and could bolster private litigation against Tesla over Musk's claims on going private, while the prospect of Musk's complete removal was also worrisome. "This calculation resulted in a price of $419, and Musk stated that he rounded the price up to $420 because he had recently learned about the number's significance in marijuana culture and thought his girlfriend "would find it amusing, which admittedly is not a great reason to pick a price". "Integrity is the most important value in my life and the facts will show Inever compromised this in any way", the statement said.
"I have always taken action in the best interests of truth, transparency and investors", Musk said.
And according to the court filings, they were partially made with Musk's then-girlfriend Grimes in mind.
Shares in Tesla are expected to plummet following the announcement. Musk has blamed short-sellers, investors betting on a collapse in a company's share price, for Tesla's woes.
The SEC also alleged Musk's tweets caused market chaos and investor harm.
"Tesla and the board of directors are fully confident in Elon, his integrity, and his leadership of the company, which has resulted in the most successful US auto company in over a century".
Musk later denied he was 'on weed' when posting the tweets.
In a brief joint statement, Tesla and its board said they are "fully confident" in Musk, his integrity and his leadership of the company.
"I think it was a big mistake to turn down the settlement offer", CFRA analyst Garrett Nelson said.