{"id":128527,"date":"2018-08-07T15:32:41","date_gmt":"2018-08-07T19:32:41","guid":{"rendered":"http:\/\/www.thedetroitbureau.com\/?p=128527"},"modified":"2018-08-07T15:37:18","modified_gmt":"2018-08-07T19:37:18","slug":"musk-tweets-suggests-he-could-take-tesla-private","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2018\/08\/musk-tweets-suggests-he-could-take-tesla-private\/","title":{"rendered":"Musk Tweets Suggests He Could Take Tesla Private"},"content":{"rendered":"
\"\"<\/a>
Tesla founder and CEO Elon Musk told the Twitterverse today he was considering taking the EV maker private.<\/figcaption><\/figure>\n

For those in on doper slang, \u201c420\u201d is a familiar reference to marijuana. And to those in the financial community, it\u2019s a number that has many today asking what Tesla CEO Elon Musk might be smoking.<\/p>\n

Musk once again set the Twittersphere on fire Tuesday when he sent out a short tweet declaring \u201cAm considering taking Tesla private at $420. Funding secured.\u201d<\/p>\n

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Dig Deeper!<\/figcaption><\/figure>\n

Tesla\u2019s stock has been on fire since the automaker released its second-quarter earnings numbers last week, Musk repeating a pledge to deliver both a profit and positive cashflow for the second half of the year. Shares of TSLA were up by another nearly 8.5% as of midday trading, at around $375 rapidly taking aim at the carmaker\u2019s previous record high of $389.61.<\/p>\n

However, trading on the stock was halted before it got close to the previous high.<\/p>\n

(Tesla’s looking to hire video game designers. <\/em>Click Here<\/a><\/span>\u00a0for the story.)<\/em><\/strong><\/p>\n

But while many investors have been rushing in, apparently hoping to hold a piece of the pie should Musk really take Tesla private, others are scratching their heads, wondering if the tweet was more than a joke, or at least an attempt to break the short-sellers who\u2019ve been the bane of the CEO\u2019s existence in recent months.<\/p>\n

\"\"<\/a>
Biz reporter Liz Claman pushed Musk for answers about taking the company private.<\/figcaption><\/figure>\n

\u201cI don\u2019t know where his tweets come from. Maybe he has a joint in his hand,\u201d said Joe Phillippi, a long-time Wall Street analyst who now runs AutoTrends Consulting.<\/p>\n

\u201cI don\u2019t know where he\u2019d get the financing,\u201d Phillippi added, noting that at the current stock price the company has a market valuation of more than $62 billion, or nearly 20% more than General Motors. At $420 a share it would jump to nearly $70 billion.<\/p>\n

While Musk has aggressively fought back against the \u201cshorts\u201d in recent days, his position as CEO would limit his ability to play a doper joke \u2013 indeed, any ruse \u2013 that would be aimed at manipulating Tesla\u2019s stock price, said one observer,<\/p>\n

The SEC ruled in 2013 that companies have the right to use social media, such as Twitter, to issue news \u2013 something that Musk has clearly taken to heart. Nonetheless, said one analyst, Tesla\u2019s lawyers might now feel pressure under full disclosure regulations to put together a federal filing clarifying Musk\u2019s comments.<\/p>\n

But there\u2019s another reason why investors appear to be on a buying spree \u2013 and why there may be something serious behind Musk\u2019s initial tweet.<\/p>\n

(<\/em>Click Here<\/span><\/a>\u00a0to see why Wall Street was concerned about Tesla.)<\/em><\/strong><\/p>\n

The Financial Times earlier today reported that Saudi Arabia\u2019s Public Investment Fund had quietly pulled together a stake of somewhere between 3 and 5% of Tesla\u2019s stock, a position that could have been worth as much as $2.9 billion, even before Tuesday\u2019s buying spree hit peak.<\/p>\n

\"\"<\/a>
Tesla's Model 3 production is has been key to the company's stock returning to stratospheric levels.<\/figcaption><\/figure>\n

But even for the Saudis, with their vast oil wealth, buying out the rest of Tesla\u2019s stock would seem a stretch. Attempts by TheDetroitBureau.com to find out where Tesla might be raising cash has come up blank, and CNBC said it could find no one with knowledge of a potential leveraged buyout.<\/p>\n

There had been concern the tweet might not even have come from Musk himself. But faced with numerous comments on his Twitter page, Musk simply reposted the number \u201c420\u201d about 20 minutes after his first tweet. He subsequently added \u201cMy hope is \u2018all\u2019 current investors remain with Tesla even if we\u2019re private. Would create special purose fund enabling anyone to stay with Tesla.\u201d That\u2019s the same approach, the tweet added, that Musk has set up for his rocket firm SpaceX.<\/p>\n

A request for comment from Tesla itself has not yet generated a reply.<\/p>\n

Tesla initially went public in 2010 to raise the capital it needed to bring its three current products, the Models S, X and 3, to market. More recently, there has been an ongoing debate about whether Tesla would need to raise additional capital anytime soon. A report by J.P. Morgan Chase recently suggested the company might need as much as $10 billion more cash through 2020.<\/p>\n

(Tesla Q2 losses double, but profits promised in Q3.\u00a0<\/em>Click Here<\/a><\/span>\u00a0for the story.)<\/em><\/strong><\/p>\n

By going private, Tesla could eliminate some of the pressure Musk and company have faced. Ironically, such a move could occur at precisely the point that investors had been hoping to see Tesla reach: delivering profitable and stable financial numbers.<\/p>\n","protected":false},"excerpt":{"rendered":"

It sounds suspiciously like a doper job, but Elon Musk is signaling he may take Tesla private \u2013 and even has the funding “secured” \u2013 once its stock hits $420 a share. Is he serious? Why go private \u2014 and why wait until then? All the speculation, and rising stock price, forced a halt on trading it. Here’s more from TheDetroitBureau.com.<\/p>\n","protected":false},"author":2,"featured_media":54703,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[7,8,5],"tags":[],"make":[110],"post-state":[],"category_old":[150,151,123,171,169,132,207,288],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/128527"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=128527"}],"version-history":[{"count":0,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/128527\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/54703"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=128527"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=128527"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=128527"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=128527"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=128527"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=128527"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}