Market Madness: Musk and the SEC, Plus the CEO of Peloton Spoke With TheStreet

Here's how the SEC could approach Musk, should there be more action taken by the SEC.
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We don't know at this juncture whether or not the Securities and Exchange Commission will launch a full-blown investigation into the validity of Elon Musk's tweets about going private and having "funding secured" for such a transaction.

But several lawyers and legal experts have told TheStreet what some likely outcomes would be, should the SEC take some type of action. 

First, the SEC would request a corrective disclosure from either Musk, or Tesla. That means they would ask the company to show proof that it had communication with other parties that would supply funding for this transaction Musk speaks of. If it becomes clear Musk was untruthful, the agency could easily require Musk to enter into a consent decree, in which he would not be required to admit anything in particular, but he would agree not to violate any rules. Likely, he'd be told not to use Twitter for what the law calls material disclosures, or those that are deal related, or that impact that market. 

Okay, that's the "funding secured" problem. But there's also a question of whether or not Musk intended to boost Tesla's stock price by tweeting what he tweeted. Some experts say the mere correlation between the tweet and the stock movement is enough for short-sellers to execute a successful argument. Others say that the SEC should scour Tesla's internal emails and records to try to discern whether or not there was intent behind the tweet. 

Whatever the case is, it seems clear that class action lawsuits from investors that lost money is what Musk should be worried about.  

The CEO of Peloton chatted with TheStreet's Katherine Ross.

John Foley, CEO, believes that, while "gimmicky workouts can be fad-ish-yoga, running, cycling...are not."

The fitness technology company, as it likes to refer to itself, has been around since 2012 and looks like it's here to stay after an early struggle to put together financing.

"I was incredibly unsuccessful for the first three years although I pitched hundreds of investors," said Foley. The niche popularity of 'boutique fitness' made for a rough start. Boutique fitness, trends like ClassPass and other groups that combine different workouts, has become mainstream.

Foley noted his success, telling The Street, "we're building...addition to software and content is pretty powerful and...[we have a] committed community of riders."

But what about the bike's whopping $2,000 price tag? Foley had an answer for that, too.

Oh, and, "[Peloton] plans to IPO next year," he said.