Elon Musk tweets he is taking Tesla private at $US420

08 August, 2018, 08:28 | Author: Barbara Daniel
  • Elon Musk says he's considering taking Tesla private | TheHill

Two words on Twitter may haunt Elon Musk: "Funding secured". It's not uncommon for trading in a stock to be halted in the wake of unexpected or unsettling news.

In its second quarter results for 2018 the company posted $4bn of revenue and a loss of $717m.

Musk said that he hoped all current investors would stay with Tesla even if it went private. Often his erratic behaviour has drawn more attention than his struggles to shift Tesla from a niche luxury auto maker into a mainstream automotive company.

Tesla has been publicly traded since 2010, and has seen its share price rise from just under $20 then to $360 at time of writing.

Mr. Musk could also face scrutiny by the U.S. Securities and Exchange Commission if his tweet turned out to be a joke.

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.

The SEC declined to comment on Tesla, but the regulator has previously declined to sanction Netflix CEO Reed Hastings in 2013 for revealing important company information on Facebook.

His tweet came hours after the Financial Times reported that Saudi Arabia's sovereign wealth fund had bought a $2 billion stake in Tesla Inc., but it was unclear if that was the funding Musk was referring to.

And yet it also left many questions unanswered, namely how Musk - who owns nearly 20 percent of the company - would be able to come up with the $66 billion necessary to complete the transaction.

Going private would take the company out of the quarterly reporting cycle, making it "free from as much distraction and short-term thinking as possible", Musk said in a blog post.

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.

The number of shares borrowed to sell the stock short stands at 33.8 million shares, according to data compiled by IHS Markit, meaning that Musk's tweet alone sent a $US783 million shock through the bear patch.

His plan, outlined in the email to employees, would give shareholders a choice to sell their shares or maintain a stake in the private company. "Funding secured, ' Musk tweeted, following up with 'good morning" and a smiley emoji.

Since Tesla is also the most shorted stock in history, Musk said the company's doubters have incentive to bash the company and depress the company's share price.

It appears that Musk is hopeful that shareholders will simply hang in for the ride and willingly go private.

Gene Munster, managing partner at Loup Ventures and a top tech analyst, said the odds that Musk will take Tesla private were about one in three. "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". He added that in the future, when Tesla reached a "phase of slower, more predictable growth", the firm could go public again.

Recommended:



Popular

Salomon Rondon sends heartfelt message to West Brom fans after joining Newcastle
Every top flight club must assist the Premier League's host broadcasters as they gather video footage ahead of the new campaign. But Benitez clearly feels more must be done, adding: "I am not happy we are looking to just survive every year".

Google Announces Android 9 Pie, Available Now For Pixel Devices
It automatically turns on the Night Light blue light filter, switches Do Not Disturb mode on, and makes the screen grayscale. The screen will also fade to grayscale at bedtime to help you do not forget to get to sleep at your chosen time.

Small plane crashes in Switzerland, several people killed
The airline posteda statement online: "We have the sad duty to announce that one of our Ju-52 aircraft had an accident today". The plane that crashed had its last maintenance check in late July, Waldmeier said, at which time no defects had been found.

July jobs report, August 2018
Mining, wholesale trade, transportation and warehousing, information and financial activities remained mostly flat, the BLS said. Service-providing sectors grew by 177,000 jobs, with health care/social assistance gaining the most with 49,000 jobs.

'Tried to kill me': Venezuela President Maduro escapes drone assassination attempt
Maduro and the rest of the government escaped unharmed, he said, adding that seven National Guard soldiers were injured. Venezuela's president Nicolas Maduro has claimed he survived an assassination attempt involving exploding drones.

Thomas Markle Admits Using Drugs When Meghan Was Growing Up
She was close with Elizabeth until her death on March 30, 2002. "That means we can't hear what she is saying". Despite her previous high-profile career, Markle has appeared visibly nervous during several events.

Wantaway Liverpool Striker Under Pressure To Make Major Transfer Decision
Liverpool are allegedly considering a late bid for Arsenal midfielder Aaron Ramsey , who has less than a year remaining on his contract.

Turkey vows to hit back against sanctions over preacher's arrest
Pastor Andrew Brunson has been held for almost two years over alleged links to Erdogan's political rivals. Erdogan, who is known for his sometimes provocative anti-Western rhetoric, has yet to comment.

Google in China: Internet giant 'plans censored search engine'
Google had a very public fallout with the Chinese government a few years ago when they refused to censor searches in the country. Brin has stepped back from day-to-day operations and the internet giant is now run by Chief Executive Officer Sundar Pichai .

India vs England stats: All the numbers from Virat Kohli's epic feats
After that, there was no looking back for the India bowlers as they kept on taking wickets at regular intervals. He put together a 48-run partnership for the sixth wicket with all-rounder Hardik Pandya.