SEC?
Elon Musk, SPACs, and the SEC are all hot topics in the financial world, especially this year, but what happens when you mix the three together? Well just today Elon Musk did just that by making a comment on the SEC and the quality of their regulations. To preface, Elon has had his own run-ins with the SEC, for example, back in August of 2018 he infamously tweeted he had “funding secured” to potentially take Tesla private in a $72 billion transaction. In reality, Musk was not close to acquiring funding. This led to Elon and Tesla each having to pay a hefty $20 million in civil fines, and Tesla lawyers needing to vet some of Musk’s future tweets before they were shared.
As of yesterday, the SEC and Elon had yet another run in, but this time Elon was the actor. He said that although the SEC was an important entity for the safety of investors, it is odd why they don’t do more to protect investors from blank-check companies, also known as SPACs. If you need a refresher, a SPAC stands for special-purpose acquisition company, and serves as another way for a company to go public instead of the traditional IPO. Musk specifically tweeted: “They have an important role to play in protecting the public from getting swindled but are sometimes too close to Wall St Hedge Funds imo (in my opinion)”.
Do you agree with Elon Musk? Or do you think that the SEC is doing an adequate job with respect to regulating SPACs?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
