Tesla trading halted after Elon Musk tweets about taking company private

Elon Musk tweet 'Am considering taking Tesla private at $420. Funding secured'

Tesla CEO Elon Musk has shocked the financial world with a tweet saying he is considering taking the company private in a move that would pay $420 (£324.58 / €362.11) per share.

Upon the news, Tesla stock quickly shot up to $365, climbing toward $420 - the amount Musk noted would be the trigger price.

Musk said he wants to take the $64 billion company private because of the "large numbers of people who have the incentive to attack the company".

Elon now owns about 20 percent of Tesla and so he would need something like $50 billion in additional capital to fully privatize the company, along with a shareholder vote of "yes" to the move.

Elon Musk said he's considering taking Tesla Inc. private in a radical step that would ease pressure on the money-losing automaker.

The tweets came after a report in the Financial Times that Saudi Arabia's sovereign wealth fund had taken a 3%-5% stake in Tesla, a holding worth at least $1.9bn.

The electric auto maker reported revenue of $4 billion in the second quarter of 2018, with $2.2 billion in cash in hand.

Musk releases an official statement for the company.

Before its recent rally, Tesla's share price had been in a downward spiral for much of the summer, as the company struggled to meet production targets for its midrange Model 3 sedan.

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

About an hour and a half after Musk's first tweet, trading on Tesla halted amid concerns of securities fraud.

Tesla lost US$717-million in the second quarter, its largest quarterly loss. And finally, he maintains that going private isn't about accumulating control for himself: "I own about 20% of the company now, and I don't envision that being substantially different after any deal is completed", Musk wrote.

Tesla has had more than its share of ups and downs over the past few months, due to an intense focus on production rates and sales figures for Tesla's mass-market Model 3 electric auto.

The Wall Street regulator did not immediately respond to a request for comment on Musk's tweet. "Given his historic frustration with short sellers, analysts and certain parts of the press, it is perhaps also not surprising that he has given consideration to taking the company private", Galliers said.

Going private would reduce the market pressure on Tesla, especially from short sellers who believe Tesla is set up to fail and are pursuing strategies to profit from Tesla's troubles.

And since his tweet, he's elaborated on the idea and shared a blog post explaining that he's quite serious. The Saudi fund approached Musk about buying new shares, was rebuffed, and instead bought the shares in secondary markets.

"Details, structure, participants and how the valuation has been determined remain to be seen".

Related News:

Most liked

Melania Trump backs LeBron after US President critices
The interview was meant to discuss the opening of the school LeBron helped found, but the conversation quickly turned political. He acknowledged his support of James, sure, but he in no way admonished the President for his racist attack on Lemon and James.

Containment Of Massive Mendocino Fire Not Expected Until September
In 2017, there were 3,662 fires in the same period, burning 90,340 hectares. The Mendocino Complex , which is 30 per cent contained, is still growing.

Paul Manafort’s Accountant Testifies She Helped Alter Financial Documents
With offhand remarks, aggressive pushback and a need for speed, Judge Ellis has become a character in this trial himself. Though this case is not about Russian Federation or possible election conspiracy, it has captured Trump's attention.

Woman fined $210 for wearing burqa in Denmark under new law
Since 1 August, Denmark's much-debated burka ban has provoked protests and criticism from human rights groups. Supporters of the law, meanwhile, claim the law will better integrate Muslims into Danish society.