Tesla shares stop when Elon Musk tweets that he will take the private signature

Tesla CEO Elon Musk says he is considering privatizing the electric car manufacturer.

Tesla CEO Elon Musk says he is considering privatizing the electric car manufacturer.

Tesla CEO Elon Musk says he is considering privatizing the electric car manufacturer.

Tesla shares were suspended on Tuesday afternoon after CEO Elon Musk tweeted that he is considering taking the electric car company privately at $ 420 per share, a significant jump from the current price of about $ 379.

Musk said the private transaction has received support from investors and now depends on the vote of shareholders to become official.

In a letter to employees, Musk emphasized that "a final decision has not yet been made," but that doing it privately would create an environment for "Tesla to work better."

The initial announcement caused Tesla's shares to rise 6.8 percent to $ 365.36, adding $ 900 million to Musk's fortune in the process.

The stock was stopped at $ 367 per share shortly after 2 p.m. (ET), since some were concerned that Musk's tweets were an attempt to manipulate the market.

The actions resumed shortly before 4 p.m. (ET) and they were climbing more than 11 percent to $ 379.89.

The tweets are the latest example of a long series of strange outbursts of the technology billionaire billionaire.

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Musk's private announcement caused the company's stock to grow about 7 percent to $ 365.36 just after 2pm ET, adding $ 900 million to Musk's fortune in the process.

Tesla shares were suspended at $ 367 per share shortly after 2 p.m. (ET), since some were concerned that Musk's tweets were an attempt to manipulate the market. The actions resumed shortly before 4 p.m. and they were climbing more than 11 percent to $ 379.89. A live chart of Tesla shares is displayed

Musk made the announcement of a series of tweets, saying that he had already secured the funds for the private transaction.

I am considering taking Tesla privately at $ 420. Secured financing, & Muscle tweeted, following up with & # 39; good morning & # 39; and a smiling emoji.

At $ 420 per share, that means that Musk would have to buy Tesla at the incredible $ 82 billion price, in what would probably be one of the largest transactions in history.

He shared more details in a series of Twitter responses, noting that if Tesla became private, he would continue to play his role as the founder and CEO of Tesla.

For current shareholders, Musk said he would institute a provision for his shares to be converted into private equity, adding that he would guarantee his prosperity in any situation.

MUSK EMAIL FOR PERSONNEL AFTER TWEETING PLAN TO GO PRIVATE

Theme: Taking Tesla Private

August 7, 2018

Earlier today, I announced that I am considering taking Tesla privately at a price of $ 420 per share. I wanted to let you know my reason for being, and why I think this is the best way to go.

First, a final decision has not yet been made, but the reason for doing this is to create the environment for Tesla to work better. As a public company, we are subject to abrupt changes in the price of our shares that can be a great distraction for all those who work at Tesla, all of whom are shareholders. Being public also subjects us to the quarterly earnings cycle that exerts enormous pressure on Tesla to make decisions that may be appropriate for a given quarter, but not necessarily in the long term. Finally, as the shortest stock in the history of the stock market, being public means that there are a large number of people who have the incentive to attack the company.

I fundamentally believe that we are at our best when everyone is focused on execution, when we can remain focused on our long-term mission, and when there are no perverse incentives for people to try to harm what we are all trying to achieve.

This is especially true for a company like Tesla that has a long-term and prospective mission. SpaceX is a perfect example: it is much more efficient from the operational point of view, and that is largely due to the fact that it is privately owned. This does not mean that it makes sense for Tesla to be private in the long term. In the future, once Tesla enters a slower and more predictable growth phase, it is likely to make sense to return to public markets.

This is what I imagine being private would mean for all shareholders, including all our employees.

First, I would like to structure this so that all shareholders can choose. Either investors can stay in a private Tesla or they can buy at $ 420 per share, which is a 20% premium over the stock price after our second quarter earnings call (which had already increased by 16%) . My hope is that all the shareholders remain, but if they prefer to be bought, this will allow that to happen at a good price.

Secondly, my intention is for all Tesla employees to remain shareholders of the company, as in the case of SpaceX. If we were private, employees could still sell their shares periodically and exercise their options. This would allow him to share the growing value of the company that everyone has worked to build over time.

Third, the intention is not to merge SpaceX and Tesla. They would continue to have separate structures of ownership and government. However, the structure planned for Tesla is similar in many ways to the structure of SpaceX: external shareholders and employee shareholders have the opportunity to sell or buy approximately every six months.

Finally, this has nothing to do with the accumulation of control by myself. I own approximately 20% of the company now, and I do not imagine it to be substantially different after any deal is completed.

Basically, I am trying to achieve a result in which Tesla can operate in the best way, free from as much distraction and short-term thinking as possible, and where there are so few changes for all of our investors, including all our employees, as possible.

This privatization proposal will finally be finalized through the vote of our shareholders. If the process ends as I hope, a private Tesla would ultimately be a huge opportunity for all of us. Either way, the future is very bright and we will continue to fight to achieve our mission.

Thanks, Elon

His tweet came hours after the Financial Times reported that the sovereign wealth fund of Saudi Arabia had bought a $ 2 billion stake in Tesla Inc.

However, it is not clear if that was the funding that Musk referred to.

The Financial Times, citing anonymous people with direct knowledge of the matter, said the Saudi Investment Fund had built a stake of between 3 and 5 percent of Telsa's shares.

The Saudi fund initially wanted to buy Tesla shares recently issued, but eventually bought the shares in the secondary markets.

Tesla did not respond immediately to requests for comments.

It is very rare for the director of a large company to make a significant announcement casually.

The tweet raised questions about how serious Musk's intentions were.

Some questioned whether Musk violated the rules of the Securities and Exchange Commission.

However, there are provisions in SEC rules that allow certain material announcements to be made on social media platforms.

So far, the SEC has refused to comment on the matter, but experts say it could be fuel for a possible investigation later in the future.

"If your comments were issued for the purpose of moving the stock price, that could be manipulation, it could also be securities fraud," former SEC Chairman Harvey Pitt told CNBC.

"The use of a specific price for a potential private private transaction is unprecedented and therefore raises important questions about what your intention was, so that would have to be investigated.

Its selling price of $ 420 would be 22 percent of the closing price of Monday's shares, and almost 9 percent above the all-time closing high of $ 385.

Musk even pulled some jokes on Twitter about whether it was a marijuana reference, with 420 being a common term in marijuana slang.

Later on Tuesday afternoon, Musk said the private transaction would particularly hurt short sellers, a group that the CEO has been fighting for years.

Short sellers are investors who borrow shares in a company in the hope that stocks will fall, so they can buy them back at a lower price and make a profit.

& # 39; Def there are no forced sales. I hope all the shareholders stay. It will be much smoother and less harmful as a private company, "Musk said in a tweet.

& # 39; Ends the negative propaganda of the shorts & # 39;

The tweets have already cost short sellers more than $ 800 million in market value losses, according to CNBC.

Musk's tweet came two weeks after Tesla revealed that he had spent $ 739.5 million in cash on his way to a record net loss of $ 717.5 million in the second quarter, as it generated more electric cars. In the photo you can see the crossover SUV model of the firm

Musk's tweet came two weeks after Tesla revealed that he had spent $ 739.5 million in cash on his way to a record net loss of $ 717.5 million in the second quarter, as it generated more electric cars. In the photo you can see the crossover SUV model of the firm

Musk's tweet came two weeks after Tesla revealed that he had spent $ 739.5 million in cash on his way to a record net loss of $ 717.5 million in the second quarter, as it generated more electric cars. In the photo you can see the crossover SUV model of the firm

WHY ELON MUSK WANTS TO TAKE PRIVATE TESLA?

In a surprise announcement on Tuesday, Tesla CEO, Elon Musk, announced that the privatization of the electric car company weighed at $ 420 per share.

A price of $ 420 per share would value Tesla at $ 82 billion and represents a significant jump from current levels of approximately $ 379 per share.

Being private implies a transaction (s) that takes a company out of the public market, which means that retail investors can no longer market shares in the stock market.

The transactions to be carried out may be conducted by a non-controlling shareholder, a private equity firm that makes a leveraged purchase or a consortium of companies.

Musk said he received broad support from investors for the move. The only thing that gets in the way of an official announcement is the vote of the shareholders.

Being private would allow Tesla to avoid many of the pressures of public markets, such as stock price fluctuations, the scrutiny of Wall Street analysts, as well as the "attacks" of short sellers, a group that Musk said & # 39; I want & # 39; [Tesla] die so badly that they can prove it.

In a letter to employees, Musk said Tesla's volatile stock has been a "big distraction" for the staff and that being public created a lot of pressure on the company to make decisions that may be appropriate for a given quarter. , but not necessarily correct for the long term. & # 39;

If Tesla becomes independent, it would no longer be required to file public financial statements or make quarterly earnings calls with Wall Street analysts.

These events tend to cause upward or downward oscillations in Tesla's actions.

Musk's tweet came two weeks after Tesla revealed that he had spent $ 739.5 million in cash on his way to a record net loss of $ 717.5 million in the second quarter, as it generated more electric cars.

Tesla spent millions when it reached the goal of producing 5,000 Model 3 sedans per week by the end of June.

The company says that production is increasing, aiming for 6,000 per week at the end of August.

Musk made a commitment early this month to record net profits in the coming quarters, and said he expects the company to avoid returning to the capital markets and will be self-financed in the future.

In the letter describing the takeover of Tesla as private, Musk explained that doing so would protect the company from much of the scrutiny of public markets.

"As a public company, we are subject to abrupt changes in the price of our shares that can be a great distraction for all those who work at Tesla, all of whom are shareholders," Musk wrote.

It also exerts enormous pressure on Tesla to make decisions that may be appropriate for a given quarter, but not necessarily in the long term, "he added.

The abrasive musk style has often been a source of friction with Wall Street. Earlier this year, he caused a stir during a first-quarter earnings consultation when he angrily cut two analysts whose questions bothered him.

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

The other Musk company, the SpaceX aerospace firm, is privately owned.

WHAT ARE THE MOST RECENT RESULTS OF ELIZO MUSK'S BIZARRE?

Last month, Musk attacked the British diver Vern Unsworth, who had dismissed the efforts of the boss of Tesla to help the rescue mission of the 12 children as a "public relations trick" in an interview widely seen on CNN.

Musk, without providing any justification or explanation, referred to Unsworth as a 'fart guy'. in a since-deleted tweet on Sunday. & # 39; Fart & # 39; it is the abbreviation of pedophile.

Unsworth told AFP that he had not reviewed the tweets in their entirety and had only heard about them.

But Unsworth said: "If that's what I think it is," he asked if he would take legal action against Musk for the indictment.

Musk also denied making donations to a political action committee dedicated to helping Republicans maintain control of the house.

This happened despite the fact that the Federal Electoral Commission issued annual documents this week that show Musk as one of the top 50 donors.

While Musk described himself as "half democratic, half repulican" in the past, it seemed hypocritical to many that a green energy CEO donate almost $ 40,000 to keep a political party that has ignored or denied power in power. change climate.

Despite the fact that the publicly available FEC documents show their donations to the PAC, Musk tweeted on Saturday that the reports that I am a GOP senior donor are categorically false.

"I am not the main donor of any political party," he said.

In recent months, Musk has been involved in a series of disputes with the media.

He punished reporters for focusing on autonomous car accidents instead of their safety potential, and accused a news organization of being "implacably negative" about Tesla.

Shares were hit in May after Musk abruptly cut off questions from Wall Street analysts about Tesla's spending plans.

On a profit call, he chided analysts for asking "boring" questions and eluded questions about Tesla's enormous capital needs.

The billionaire called an industry analyst a "boring fool" during the bizarre session, saying that "someone else's questions are so dry that they're killing me."

Last month, he alleged a "sabotage" in the operations of Tesla by an employee, who responded by claiming to be a "whistleblower".

The CEO of Tesla wrote a long note to all his staff saying that he had discovered someone working intensely to cause malicious damage within the ranks of the company.

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