Tuesday, 11 December, 2018

Tesla shares surge as Elon Musk mulls making firm private

Tesla CEO Elon Musk who has tweeted about vague plans to take the company private Analysts ‘as Confused as Anyone Else’ by Musk’s Plan to Take Tesla Private Getty Robyn Beck 9 Aug 2018
Nellie Chapman | 12 August, 2018, 12:01

Trading on Tesla's stock was stopped Tuesday following Musk's tweets, which sent shareholders and reporters into a scramble.

Tesla board members expect to meet next week with financial advisors to discuss chairman and CEO Elon Musk's proposal to take the company private, sources familiar with the discussions told CNBC.

The US Securities and Exchange Commission has contacted Tesla to ask about Mr Musk's assertion on Twitter that funding for his proposed deal was "secured", the Wall Street Journal reported on Wednesday.

If Tesla goes private, there will be some shareholders who aren't happy because of the loss of liquidity compared with that of stock traded daily on a exchange like the Nasdaq Stock Market, Coffee said. On Thursday, Aug. 9, Tesla shares have dropped back to near the level they were trading at before CEO Elon Musk tweeted Tuesday that he may take the company private. That erases all gains prompted by a tweet on Tuesday in which Musk publicly floated the possibility of going private , sending shares up 11 percent. Tesla, which hasn't been accused of wrongdoing, didn't immediately respond to a request for comment.

However, in the recent earnings call, Musk denied the company needs more money, saying it wouldn't be going back to the capital markets. Musk, to date has operated with a unique level of autonomy for a public company CEO, splitting his time with other business ventures (SpaceX, Boring Company), getting personally involved in projects of personal interest (rebuilding Puerto Rico, Thai cave rescues), doing deals which make no economic sense (Solar City), tweeting on whatever topic he feels like.

News of the potential buyout already has stung investors known as "short sellers" who have always been a thorn in Musk's side. This was reported by Elon Musk in his twitter handle. If the money he claimed to have doesn't follow as Tesla's privatization takes shape, he might face civil or criminal charges for manipulating Tesla stock price by spreading misleading information to investors. Musk previously said that the company would hit that number by the end of 2017 and that sustaining such a production rate is critical for Tesla to become profitable. In a note to the workers of Tesla that's posted on the Company's blog; Musk stated this idea of holding the best path in the future.

Just last week, he revealed he had been working 110 hours a week to deliver on short-term promises he had made to Wall Street, a load he traced to his boorish behavior toward two analysts earlier this year. The fund owns between 3% and 5% of Tesla's total stock, meaning the stake is likely worth $US1.7 billion to $US2.9 billion. He also emphasised on removal of the quarterly system cycle by taking tesla into private company since this quarter cycle could affect tesla's decision making between any of the quarters.