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CONTROVERSIAL TESLA CHIEF executive Elon Musk has said he was considering taking the company private, sending shares sharply higher before trading was halted.
Musk, who has cut a controversial figure on social media and beyond, sent the financial world abuzz again around 17.50pm Irish-time, tweeting, “Am considering taking Tesla private at $420. Funding secured.”
Musk said in subsequent tweets that he would remain chief executive under a go-private transaction and that any deal would benefit shareholders.
“Am super appreciative of Tesla shareholders,” Musk said. “Will ensure their prosperity in any scenario.”
Musk, who has previously discussed possibly taking Tesla private, has had bumpy relations with Wall Street, often dismissing questions over financing.
Shares close to 8% before being suspending shortly after 7pm.
Today’s gains following the tweet added to upward movement on the stock after The Financial Times reported earlier that a Saudi Arabian sovereign wealth fund had built a stake of between 3-5% in the company.
Tesla did not immediately respond to a request for comment.
Musk’s tweet comes as Tesla faces continued pressure to ramp up output of the Model 3 sedan, its first effort at the middle market.
The company began hitting production targets last month after missing a series of earlier benchmarks.
Going against the grain
Tesla shares have been on the upswing since it reported on 1 August a bigger-than-expected second-quarter but signaled that it expects to reach profitability in the third quarter and remain in the black for the foreseeable future.
Musk’s approach to a possible go-private transaction went against the grain of many companies that release major news in non-trading hours. By contrast, Musk made the initial comment on Twitter and then embellished on the remarks in a series of responses to users on the platform.
No stranger to controversy, Musk last month apologised for calling British caver Vernon Unsworth, who helped rescue 12 Thai boys from a cave a “pedo,” after Unsworth spoke dismissively of the Tesla chief’s proposal for bringing the boys to safety.
He has also had a prickly relationship with Wall Street, apologizing last week to equity analysts after refusing to answer questions on a May investor call.
The billionaire Musk himself owns a bit more than 20% of Tesla stock. He has frequently lambasted “short” sellers of Tesla shares — those who take bets that the stock will fall in value.
Following the company’s surge after last week’s earnings, Musk took aim again at a short-seller in a reposted short YouTube video that likened these investors to Hitler’s last days.
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To be fair, I do think Elon is a genius. On the flip-side however, is that his greatest talent, by far, is his ability to get other people to spend their money to make his ideas a reality.
@John Considine: Money follows ideas and charisma as we have seen with Richard Branson, do it right and other peoples money makes you a lot of money
@John Considine: he has no problem spending his own money too.
@John Considine: Tesla cars are sold at a loss. Tesla will eventually sink
@Herbert: nonsense. The model 3 is the most profitable electric car on the market and with the cost of batteries coming down all the time it’s just going to get better. Check your facts before you spout rubbish. https://www.google.co.uk/amp/s/mobile.reuters.com/article/amp/idUSKBN1K71VV
@Emachine: In 8 years they’ve only turned a profit in two quarters
@Emachine: They are badly built with ridicules panel gaps, and you wont see many 10 year old teslas on the road if any, after the guarantee the price of parts are insane. Most things are between 1000 and many 1000s.
@Herbert: Duh citing an article from 3 years ago says all I need to know about your opinion. Come back when you actually know what you’re talking about.
@Herbert: The fact they have turned a profit in 2 quarters while revolutionising a century old industry is nothing short of a miracle. They are the biggest reason all the other manufacturers are now going electric. They’ve built the biggest battery manufacturing plant in the world, brought 4 totally new ground-up vehicle designs to market. Have plans in motion for heavy goods vehicles and another couple of cars. You don’t do all that and turn a profit, you do it so when the infrastructure is in place you are in a position to dominate the market then the profits start coming in. You and your like are always looking at the next quarter and the one after that, if thats the case GE is there to take your investment. Try taking a longer view, see beyond the end of your nose and you never know, you might have helped make the world a better place and maybe even make some money along the way.
You’d want a hole in the head to buy into Tesla at this stage.Just look at the fundamentals between GM,Ford and Tesla. Tesla is a growth stock and a major gamble where it’s market valuation goes up and down on whatever tweet it’s owner comes out with. It’s valued more than the other 2 car makers who churn out thousands of cars per week as opposed to thousands per month for Tesla. It’s market capitalisation doesn’t make sense.
If you got in at $20 you’re laughing however it’s a massive gamble and when the market crashes (and it will) Tesla will drop like a stone.
@Ennui Kenny: Tesla are the forefront of technological innovation. They are only going to climb.
@Seán Ó Briain: True but they are still grossly overvalued. Plus it pure price appreciation with them and the likes of Amazon.
@Ennui Kenny: Tesla has actually been producing about 4 or 5 thousand Model 3 cars per week in recent months.
Live tracker can be seen here: https://www.bloomberg.com/graphics/2018-tesla-tracker/
@Seán Ó Briain: Being at the forefront of technology is one thing but if you ain’t bringing in the dollars you ain’t going to survive. I’m just waiting for the right moment to short CFD’s and make a few bob on the way down.
@Dermot Mc Nerney: That’s an interesting site, I must keep an eye on that. the problem is that they have registered VIN’s but that doesn’t mean that they have produced the cars. They have had problems with getting parts, parts showing defects on cars and spent a small fortune flying a whole assembly line over from Europe. Couple this with Musk’s eccentric behaviour and a few other things that can’t be mentioned here and I firmly believe that this is going to go down big time.
@Ennui Kenny: you better settle in for the long haul, you’re gonna be waiting a while.
@Emachine: Maybe so but I will never forget the lesson that I learnt when I did a 10 week course in the stock market just weeks before the Dot.com bubble burst. We got a virtual £10,000 to invest in 5 stocks and leave it there until the end of the course, we couldn’t trade it. I put £2,000 into AIB and the other 4 tranches of £2,000 into tech stocks. By week 5 I was up about £110,000 yippee!. Week 6 the bubble burst and by week 10 my total portfolio was worth £30,000.
I “lost” £100,000 in 4 weeks and I followed up 2 months later and the only thing that was worth money was the £2,000 in AIB. Stocks riding high on speculation and sentiment are fine if there is a sound backing to them and the market is stable. The moment either the company or the market hits a big bump people start to run and so does the stock. Tesla will fall, it’s just a matter of when.
It wouldn’t surprise me if the big car manufacturers are just biding their time. They’ll let Tesla make the innovation, wait for it to fail and then swoop in and pick up it’s plants and patents for a song.
@Ennui Kenny: Gm and ford build tens of thousands of cars per week around the world. Tesla numbers would be a rest day for gm and ford.
@Ennui Kenny: so you should have sold at week five then and divested again. Looks like the course thought you nothing
@Ennui Kenny: The market is a fickle place, even more so now. The biggest rule in investing is diversify, no more than 30% in any one sector.
Im not claiming Tesla is the golden goose but they are doing things differently. No company makes money in its first few years, everybody knows that and when you are entering the automotive industry that is doubly true. I think the way they have gone about their business is incredible, had they gone the conventional route they would be gone by now but to build the gigafactory and secure supply of a crucial element is inspired and takes balls of steel.
When the model 3 was launched they had 100s of thousands of people worldwide queue to put down deposits, unheard of in the automotive industry. This was basically an interest free loan from future customers….. again, inspired thinking.
When these guys get their feet under the automotive industry table and have their production snags ironed out I will be glad I got in on the ground floor, and the cherry on top is they will have dragged the conventional automotive industry out of the dark ages along the way.
@Ennui Kenny: hmmm , i think you are wrong to compare Tesla with the existing car manufacturers – they are a relic from the past and Tesla is building for the future – the two sectors with the most amount of disruption in the future are transport and energy – Tesla are leading innovators for both – their business models are also far superior to the legacy manufacturers – how is it that they can get people to put down hard cash deposits for cars before they are built when most other players have to develop and manufacture and then ship cars into showrooms and then get customers to buy them – he knows that there is less risk taking the shares off the exchanges as the naysayers and establishment ( esp major oil /energy companies are basically trying to sabotage the tesla company and the markets keep shorting the stock – he is totally right if he can secure the funding to take private and to continue to innovate – and what are the rest of the car manufacturers bust doing – they are all developing to become more like tesla and shifting to electric cars – something they should have done before Tesla came along but they were to beholden to the oil companies !!!!
@JustOneScoop: ” We got a virtual £10,000 to invest in 5 stocks and leave it there until the end of the course, we couldn’t trade it.”
Looks like you didn’t read my comment properly!
@Ennui Kenny: you are assessing tech stocks now like it was 1999 and you couldn’t be more wrong , tesla are a lot more than a model 3 car and they already made their tech open source so that’s utter nonsense about what the other car companies plans for swooping are , the other car companies were left blindsided by the tesla move in electric and are trying to play catchup with a legacy infrastructure and car manufacturing that requires thousands of parts that are going to be redundant – you might want to go read up future direction of transport as a service and the disruption for energy and transport sectors , I recommend watching tony seba on YouTube as a start , you literally couldn’t be more wrong
@Dave Hammond: Totally agree Tesla are revolutionary and are an awesome car maker, look at Nissan Leaf €45k for that thing compare that to a model 3??? Or the fact that u out deposits down, no need for showrooms intelligent people out there realize diesel petrol cars are dead and Tesla has nailed electric cars spot on, 300 range in a saloon and 0-60 in 5 secs!!! Would love a Tesla and would buy one tomorrow if I could afford one? Sayin their gonna fail is stupid not a chance in hell of that and any big car maker would buy all their patents for a small country’s net worth and Elon knows it?
@Ennui Kenny: People have been saying Tesla will sink for a long time and it hasn’t happened and wont. He is revolutionising the car market which is great for humanity as it helps push polluting cars and then hopefully other vehicles off the road.
So good he has a body spray named after him.
Visionary yes. But needs a COO. Tim Cook could buy TSLA entirely with the offshore sofa loose change that Apple have. Tim is a logistics genius.
@Stuart: and Tim Cook needs a visionary equally. Apple have sadly created nothing new since Jobs’ death.
@Stuart: What has Tim done to push Apple on from what Jobs designed?
Elon Musks’ personality cult followers would erect statues of him on the moon if they could. What did he invent again was it the motor car? electricity? the Lithium ion battery? oh yeah paypal. I credit him with doing what the auto industry should have done, what? 50 years ago? He clearly can’t take constructive criticism, much less being called an ass, which he has publicly demonstrated on numerous occasions. I think Telsa are forcing the auto industry to change in the face of vested interests like big oil and corrupt administrations – (The Trump administrations’ EPA has just rolled back the fuel efficiency requirements from 54 miles per gallon to 32 by 2020) – Think about how morally deformed you’d have be, that when electric and hybrid cars are being increasingly consumed – you give your oil buddies a dig out by making it a policy that cars require more fuel to travel less. Tesla makes millions selling carbon credits because American car manufactures simply can’t make fuel efficient cars, but the political gymnastics of the petty American president could actually personally ‘go after’ Tesla to protect big oil, or simply because Musk won’t kiss his ring.
@Robert Duncan: Google Space X.
@Mark McDermott: you’re easily impressed, google moon landing, and then add 50 years of technical innovation
A factual Hugo Drax
@Quentin Moriarty: Jesus! Moonraker ha ha
Maybe just another little jab at the short sellers…
Some jab, if he doesn’t take it private there could be a hell of a lawsuit on his hands for market manipulation.
@Markonline: you could be right there, I’m sure eyebrows were raised at the SEC
Jasus you could make a killing if you were his buddy.
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