• 3 hours $12M Seized in Massive US-Dubai Money-Laundering Raid
  • 1 day China Launches Digital Yuan As U.S. Dallies
  • 5 days Squid Game Rampage Fails to Lift Netflix Stock After Stellar Earnings
  • 5 days Why Tesla, EV Stocks, Could Remain Highly Volatile For Years
  • 7 days Did Big Bank Earnings Just Signal ‘Real’ Economic Recovery?
  • 8 days The Cannabis Industry Is Looking To Fill The Employment Gap
  • 8 days Apple Capitalizes On Upward Momentum Ahead Of Earnings
  • 11 days Earnings Beat Isn’t Enough for S&P 500 Q3
  • 13 days The New World Tax Order
  • 14 days Is Crypto Finally Ready To Pay The Piper?
  • 15 days Is It Time To Buy The Global Gaming Market Dip?
  • 18 days Even The Mafia Has A Millennial Problem
  • 20 days Zuckerberg Loses Billions in Social Media Outage
  • 21 days ‘Pandora Papers’ Leak Reveals More Financial Crime
  • 22 days US Retail Has A Major Supply Chain Problem
  • 25 days China Has Set Out To Crush Crypto...Again
  • 26 days Top Performing Cannabis Stocks of the Year
  • 27 days Millennials Could Power A 20-Year Bull Stock Market
  • 33 days The Million-Dollar Question: Will China Bail Out Evergrande?
  • 34 days Bitcoin Is Driven By Testosterone
3 Restaurant Stocks In Full Recovery Mode

3 Restaurant Stocks In Full Recovery Mode

Here are 3 restaurant stocks…

This IPO Could Open Sustainable Fashion Floodgates

This IPO Could Open Sustainable Fashion Floodgates

Allbirds--the now-cultish sustainable footwear maker--is…

  1. Home
  2. Investing
  3. Stocks

Musk’s Tesla Tweet Sparks Speculation Storm

Elon

Tesla’s chief executive is either unable or unwilling to stay away from headlines for any length of time, and this week is no exception. Yesterday, Musk tweeted that he planned to take Tesla private when its share prices hits US$420. The tweet followed an FT report that Saudi Arabia had acquired a stake of between 3 and almost 5 percent, worth US$2 billion, in Tesla.

In his tweet, Musk said he had already secured the funding for the move, adding that current shareholders could either sell at US$420 per share or stay with the company. In response to a commenter on the thread, Musk said he hoped Tesla’s existing shareholders stayed with the company. Further elaborating, he said that the company could set up a special purpose fund to enable all shareholders to remain with the company. The mechanism, Musk said, has already been employed for SpaceX.

At a price of US$420 per share, Tesla’s total value would be US$70 billion. Yesterday, the stock closed at US$379.57.

As the FT suggests, taking Tesla private may indeed be the best way forward from Musk’s perspective given the nature of his relationship with analysts at the moment. In fact, the CEO even sent an email to employees noting that taking it private would create “the environment for Tesla to operate best”, relieving the management of the quarterly earnings announcement headaches that pressure it to focus on short-term targets. It would also, said Musk, save it from short sellers that have turned Tesla into the most shorted company in the history of the stock market, in Musk’s words.

As the tweet came out soon after the FT’s report about the Saudi acquisition, one might be tempted to see it as a response to it. However, Musk’s reference to “all” shareholders that he’d like to see staying with the company suggests this would not be an accurate interpretation.

Still, when the Saudi royal family initially approached Musk directly to acquire a stake in it, the company refused, the FT reports. The family then passed things over to the Kingdom’s Public Investment Fund, which bought the stake with the help of JPMorgan. The stake makes Saudi Arabia one of Tesla’s eight largest investors.

Meanwhile, some have questioned the factual nature of Musk’s tweet, noting he could be held legally responsible for it if it was not a statement of fact; in other words, if he was simply messing around with his Twitter following. The Daily Caller quoted former SEC chairman Harvey Pitt as saying the tweet “might constitute fraud if any of the facts he disclosed are not true. Combined with the FT report about an email to employees, however, the tweet can hardly be considered anything other than a statement of plans. Whether or not these plans will come to fruition remains to be seen. 

By Irina Slav for Safehaven.com

More Top Reads From Safehaven.com

Back to homepage

Leave a comment

Leave a comment