Tesla Trading Halted After Elon Musk’s Tweets ‘Considering’ Taking Tesla Private
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Is Elon Musk tired of being the CEO of a publicly traded company? Today, August 7, 2018, Elon Musk, CEO of Tesla, tweeted, “Am considering taking Tesla private at $420. Funding secured.” Keep in mind that his tweet indicated that he is “considering”….an act that would be welcomed by all Tesla share holders. The only people who would be unhappy would be short-sellers. Tesla stock soared more than 7% before trading was halted after his tweet was made public. Musk also indicated that “funding secured” to take Tesla private at $420 per share, far above its current $364-381. This hike would place the value of the company at more than $70 billion.Tesla tradings were halted around 2:00 pm.
This rare way of breaking potentially monumental news was not well received by some former regulators who suggested that there may be conflict with SEC rules for market-moving statements. A former SEC chairman Harvey Pitt told CNBC on August 7, 2018, that Musk’s tweets “may constitute fraud if any of the facts he disclosed are not true” or if it were purely an attempt to boost the stock price. Musk continued his tweet, “I don’t have a controlling vote now & wouldn’t expect any shareholder to have one if we go private. I won’t be selling in either scenario.” Musk owns approximately 20% of Tesla, according to The Washington Post. Musk also said that there would be no forced sales of stock and it will be much smoother and less disruptive to operate Tesla as a private company. It would certainly eliminate a lot of headaches for Musk. Hopefully, by going private, it would also eliminate incentives for short sellers to try to sabotage the manufacturing process of Tesla.
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