Connect with us

News

Tesla, SpaceX, Elon Musk ventures cleared by SEC for private fundraising after tweet controversy

(SpaceX)

Published

on

Tesla, SpaceX, The Boring Company (TBC), and Neuralink have all been granted waivers allowing them to continue raising capital by privately selling restricted securities (typically private equity or debt), heading off potential barriers that would increase the difficulty of raising capital through the sale of securities.

Cued by the commission’s settled suit over CEO Elon Musk’s improper and misleading dissemination of information material to Tesla shareholders, the United States Securities and Exchange Commission (SEC) has granted investment disqualification waivers – specifically “waivers of disqualification under Rule 506 of Regulation D” – to each of the four major companies owned by Elon Musk.

Losing the ability to raise funds in this manner would make it much harder for companies like Tesla and SpaceX to raise the money frequently needed for expansions and major R&D projects, described in the waiver requests as “extremely capital intensive.” However, the bulk of the arguments provided by each company’s legal representatives can be largely ignored. Arguing to the contrary – i.e. failing to make a strong case that the given company may need private equity investment – could close critical doors that each company may not need right this moment but would like to preserve as an option.

Still, each waiver request offers a slight glimpse into the inner-workings of SpaceX, TBC, and Neuralink, typically hidden from the public eye as privately held entities.

A fleet of red Dual Motor/Performance Tesla Model 3s captured on July 10, 2018 at the Fremont factory [Credit: RS Metrics via Twitter]

Tesla

Tesla, being a publicly-traded company, offered few secrets in its waiver request. However, it did publicize the best overview yet of what exactly the SEC’s demand for the regulation of Elon Musk’s Tesla-material communications might translate to inside the company. According to Tesla’s legal representatives, the company is arranging the creation of “new, permanent committee…of independent directors only [that] will provide an additional check on the procedures and processes for overseeing Mr. Musk’s Tesla-related public statements.” Tesla will also reportedly task “another experienced securities lawyer…to undertake an enhanced review of communications made through Twitter and other social media by the [sic] Tesla’s senior officers.”

The hope is that this new arrangement will prevent a recurrence of the misconduct that led to the SEC’s suit and the subsequent settlement. More likely, however, is that the threat of the modification or withdrawal of these four waivers will prevent Musk from stepping outside the bounds of the SEC’s binding settlement agreement, as doing so could truly harm the potential of all four companies.

Advertisement
Building giant rockets and the factories needed for production is no less expensive. (Pauline Acalin)

SpaceX

In SpaceX’s waiver request, the company’s legal representatives confirmed that it has raised “more than $2 billion in [eleven separate] securities offerings” that fell under the purview of activities SpaceX would be disqualified from pursuing without a waiver from the SEC. The total value of investments on the public record currently hovers around $2.27 billion, including a partially-finished Series I round that has likely raised that to value to ~$2.5 billion since it surfaced in April 2018.

“The design and manufacture of launch vehicles and spacecraft is extremely capital intensive. SpaceX needs sufficient [and may need to raise additional] capital to fund its ongoing operations and future expansions, for example: development of its BFR launch vehicle and Crew Dragon spacecraft, continuing research and development projects, and making investments in tooling and manufacturing”

The Boring Company & Neuralink

As for TBC and Neuralink, the waivers didn’t offer anything unexpected, although they did provide great, brief overviews of what exactly the two companies are currently working towards. Although it was announced in late 2017 that Musk would sell stock to fund initial operations at TBC and Neuralink, both companies’ legal representatives confirmed the exact amount of funding raised by “Musk and various other third-party investors”: $112.5 million and $100.2 million, respectively.

Both expressly confirmed no intentions to pursue initial public offerings (IPOs) anytime soon, although Neuralink’s waiver indicated that it may invest in or acquire other companies pursuing brain-computer interfaces.

 

The Boring Company

“The Boring Company (TBC) is a fast-growing infrastructure and transportation company focused on developing cost effective, and fast tunneling technology, along with electric mass transportation systems to alleviate the massive problem of traffic and congestion within cities. The research, development, design, manufacture, testing, and construction of tunnels and mass transit systems is a capital intensive business. TBC needs sufficient capital to fund its ongoing operations and future expansions, for example: continued development and improvement of Tunnel Boring Machines (“TBMs”) and electric skates, the construction of mass transit tunnels including publicly announced projects in Chicago, Los Angeles, and Washington D.C..”

Advertisement

Neuralink

“Neuralink is a fast-growing bio-technology and medical device company focused on developing high bandwidth, long term, brain computer interfaces (“BCI”). The research, development, design, manufacture, testing, and certification of medical devices and BCI’s is purely capital intensive business requiting deep investment for years prior to any initial revenue. Neuralink needs sufficient capital to fund its ongoing operations and eventually bringing products to marked, for example: continued development of BCI’s, continued testing of implantable devices, financing of multi-year FDA trials and certifications, and the construction of FDA-approved manufacturing facilities. Neuralink will need to raise capital for these operations and expansions, and given the development stage of the company, it is most likely that such financing will be through private securities offerings in reliance on Rule 506 of Regulation D.”

Eric Ralph is Teslarati's senior spaceflight reporter and has been covering the industry in some capacity for almost half a decade, largely spurred in 2016 by a trip to Mexico to watch Elon Musk reveal SpaceX's plans for Mars in person. Aside from spreading interest and excitement about spaceflight far and wide, his primary goal is to cover humanity's ongoing efforts to expand beyond Earth to the Moon, Mars, and elsewhere.

Advertisement
Comments

Cybertruck

Tesla launches Cybertruck orders in a new market with a catch

Published

on

Credit: Tesla

Tesla is launching Cybertruck orders in a new market, but there’s a bit of a catch.

The Cybertruck was launched in the Middle East earlier this year, as Tesla launched the ability to place a reservation for the all-electric pickup in the United Arab Emirates. It would be the first market outside of North America that would have the ability to place an order for the Cybertruck.

Tesla confirms Cybertruck will make its way out of North America this year

Other markets where the vehicle has been widely requested, like Europe and Asia, have still not approved the vehicle to be sold to the public, mostly because of size and design restrictions.

However, in the UAE, Tesla is opening up the ability for those who placed reservations for the vehicle to finally put in their order. The Order Configurator is only available to those who have already placed a reservation; it is not yet available to the public.

Advertisement

Tesla said it would open up the public online configurator across the Middle East in the coming weeks:

The UAE is not the only country that will have access to the Cybertruck, as fans in other Middle Eastern countries will also be able to place orders soon. Tesla announced back in April that Saudi Arabia and Qatar would also have Cybertruck deliveries.

Advertisement

These vehicles will be built at Tesla’s Gigafactory Texas plant just outside of Austin, as Gigafactory Berlin and Gigafactory Shanghai, two factories located in the same hemisphere as the Middle East, do not have established lines for Cybertruck production.

As for the other markets, Tesla CEO Elon Musk has hinted that the company could develop a smaller Cybertruck for those markets, as he admitted that in the long term, it likely made sense to build a more compact version for regions where roads are traditionally tighter.

Elon Musk hints at smaller Tesla Cybertruck version down the road

There has been no evidence of Tesla developing this more compact version, but it could eventually happen.

Advertisement
Continue Reading

News

Tesla rolls out new life-saving feature for kids in Europe

On average, 37 children die every year from being left in vehicles unattended.

Published

on

tesla model x
Credit: Tesla

Tesla is rolling out a new life-saving feature in the European market, one that has been available in the United States for some time and can be considered potentially invaluable.

One of the most preventable causes of death for children is being left in cars unattended. On average, 37 children die every year after being left in hot vehicles. The cause of death is usually heatstroke, and it is incredibly avoidable.

Tesla rolls out new crucial safety feature aimed at saving children

However, there are instances where kids are left in vehicles and lose their lives, something that many companies have tried to fight with alerts and features of their own.

Tesla is one of them, as it has rolled out features like ultrasonic sensors to detect heartbeats, interior cameras to detect movement, and alerts to notify parents if they leave someone in the car.

Advertisement

A few months ago, Tesla rolled out a new feature called “Child Left Alone Detection” in the United States. It was described as:

“If an unattended child is detected, the vehicle will flash the exterior indicator lights, play an alert tone, and send a notification to your Tesla app. This will repeat at regular intervals until you return to your vehicle. Cabin data is processed locally and is not transmitted to Tesla.

This feature is enabled by default. To disable, go to Controls > Safety > Child Left Alone Detection.”

This feature was only rolled out in the U.S. at the time. It is now making its way to the European market, according to Not a Tesla App, which detected the rollout in the 2025.32.6 software update.

The rollout of this feature could specifically change many unfortunate situations. For many of us, it seems hard to think about leaving something as precious as another human life in a hot car. Many of us won’t leave our vehicles without our cell phones, so it seems unlikely that someone would do it without a child.

Advertisement
Continue Reading

News

Tesla gets another NHTSA probe, this time related to door handles

“Although Tesla vehicles have manual door releases inside of the cabin, in these situations, a child may not be able to access or operate the releases even if the vehicle’s driver is aware of them.”

Published

on

Credit: Tesla

Tesla is facing another investigation into its vehicles by the National Highway Traffic Safety Administration (NHTSA), this time related to an issue with its door handles.

In a new Open Investigation named “Electronic door handles become inoperative,” the NHTSA says that it has received nine complaints from owners of the 2021 Tesla Model Y stemming from “an inability to open doors.”

These issues were reported after “parents exited their vehicle after a drive cycle in order to remove a child from the pack seat or placing a child in the back seat before starting a drive cycle.” Parents said they were “unable to reopen a door to regain access to the vehicle.”

Tesla door handles become unlikely hero as they stump road rager

Four of the nine complaints ended with having to break a window to regain access to the cabin.

Advertisement

The NHTSA goes on to explain that, while Teslas do have a manual door release inside the cabin, a child may not be able to access it:

“Although Tesla vehicles have manual door releases inside of the cabin, in these situations, a child may not be able to access or operate the releases even if the vehicle’s driver is aware of them. As a result, in these instances, an occupant who remains inside a vehicle in this condition may be unable to be rapidly retrieved by persons outside of the vehicle.”

Advertisement

It appears that the agency is attributing the issue to a low voltage in the vehicle’s 12V DC battery. This would mean there needs to be some sort of notification to the driver that the battery is running low on power and should be replaced to avoid this issue.

The NHTSA estimates that 174,290 vehicles are potentially impacted by this issue. It plans to assess the scope and severity of the condition, the agency says. The NHTSA also wants to see what approach Tesla uses to supply power to door locks and the reliability of the applicable power supplies.

Continue Reading

Trending