Published: Wed, August 08, 2018
Markets | By Otis Pena

Elon Musk tweets he may take Tesla private and shares roar

Elon Musk tweets he may take Tesla private and shares roar

"Funding secured", Musk tweeted in early afternoon.

No matter if he was joking or not, as soon as Musk tweeted about this, the stock spiked. Investors have also applauded Mr. Musk's efforts to rein in spending and boost Model 3 production to 5,000 vehicles a week, in part by running production lines inside a giant tent on the grounds of Tesla's Freemont, Calif., factory.

Musk detailed his proposal in a blog post on the company's website Tuesday, hours after stunning the company's followers by casually tweeting that he might take it private.

Mr Musk has been under intense pressure this year to prove he can deliver on his promise to turn his money-losing company into a profitable higher-volume manufacturer.

One of the more notable short sellers in Tesla's stock, Jim Chanos of Kynikos Associates, commented on Musk's tweet to CNBC.

DON'T MISS: Analysis: Did Tesla's earnings call and stock surge save Musk and skip skeptics? That said, if they do want out, they can sell their shares at $420 per share, which is a fair bit higher than Tesla's current stock price ($382.67 at the time of writing, up from today's open price of $343.84).

After his initial tweet, he followed up several times when answering questions from users on the platform.

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So, when I get the brief, in fact we are going to issue a (press) release, " the Police boss said. The presidency in a statement said the obstruction of lawmakers was without its consent.

In contrast, private companies have a smaller number of shareholders-generally fewer than 2,000-and are not available for purchase on public markets.

$420 per share would be a significant premium on where Tesla is now trading, and also its performance over the first half of the year.

Tesla did not immediately respond to a request for clarification.

Tesla Motors started selling its stock to the public in 2010 - the first initial public offering of a USA automaker in more than a half-century.

A buyout at US$420 per share probably won't let Musk reap any benefit from the US$2.6b stock option grant he received this year. The company had a market value of $58bn as of Monday's close. "Either they can stay investors in a private Tesla or they can be bought out at $420 per share, which is a 20 percent premium over the stock price following our Q2 earnings call". He also stated that this is not an attempt to assume more control over his company - Musk owns approximately 20 percent of Tesla right now, and he doesn't see that changing after the company goes private.

In a 2013 report, the SEC said companies can use social media outlets to announce important information, so long as they comply with regulations and "investors have been alerted about which social media will be used to disseminate such information". "Funding secured." Trading in the stock was halted shortly afterward with the shares up 7 percent at $367.25. "His mission for Tesla (to accelerate the globe's adoption of sustainable energy) is both grand and long-term, making it hard to accommodate investors quarterly expectations".

The mysterious tweet sent out this morning read: "Am considering taking Tesla private at $420". He also suggested the move could only be temporary as he stated "once Tesla enters a phase of slower, more predictable growth, it will likely make sense to return to the public markets".

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