Published: Wed, August 08, 2018
Economy | By

Tesla share trading halted after Musk tweet boost

Tesla share trading halted after Musk tweet boost

When NASDAQ trading was stopped, Tesla's shares were at $366.94, a 7.3 percent gain.

Musk has long raged against short sellers and mentioned his desire to be rid of them as one of his reasons for taking Tesla private.

At 3:28 p.m., Tesla tweeted a link to a blog posting on its website titled "Taking Tesla Private", in which Musk said: "As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders".

"Am considering taking Tesla private at $420".

The disclosure initially raised questions whether the eccentric Musk was joking, but he then amplified on his plan in a subsequent tweet that said he meant to create a special fund that would allow all current Tesla shareholders to retain a stake in the vehicle maker if they want.

Shares in Tesla hit $367.25 after a message posted at 9.48am NY time on Mr Musk's verified Twitter account said: "Am considering taking Tesla private at $420. Already do this with Fidelity's SpaceX investment", Musk tweeted, referring to the private space launch company Musk also runs.

He tweeted minutes after it was reported that Saudi Arabia's sovereign wealth fund had taken a stake of up to 5pc in Tesla, a holding worth as much as $2.9bn (£2.2bn).

In an internal email, sent from Musk to Tesla employees on August 7, the CEO confirmed most of this, as he explained his thinking directly.

Tesla did not respond to a request for comment immediately.

At $420 a share, a buyout of Tesla would cost about $71 billion. And predictably enough Twitter leaped to the 4/20 pot-smoking references. Employees would remain shareholders, and Tesla would be independent of Musk's other company, Space X, though the structures would be similar.

The company says production is rising, with the goal of 6,000 per week by the end of August.

Musk has been under pressure to prove he can deliver on his promise to turn his money-losing company into a profitable higher-volume manufacturer of electric vehicles.

Mr Musk did not disclose the source of the funding. Tesla lost another $717.5 million in its most recent quarter.

The CEO apologized to those analysts during the second quarter call. 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.

Last month, Musk attacked British diver Vern Unsworth, who had dismissed the Tesla chief's efforts to help the rescue mission for the 12 boys as a "PR stunt" in a widely seen interview on CNN.

Whether Musk's tweet was ethically proper or not, all of the experts interviewed by FOX Business agree the move was unprofessional at best.

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