Tesla share trading halted after Musk tweet boost

Tesla share trading halted after Musk tweet boost

Tesla share trading halted after Musk tweet boost

Shares finished up 11 per cent at US$379.57 after being suspended for about 90 minutes following a series of Musk statements on Twitter in which he initially floated the idea of going private.

The furor over Musk's tweets has led to a halt on $TSLA trading.

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.

Elon now owns about 20 percent of Tesla and so he would need something like $50 billion in additional capital to fully privatize the company, along with a shareholder vote of "yes" to the move.

One of the more notable short sellers in Tesla's stock, Jim Chanos of Kynikos Associates, commented on Musk's tweet to CNBC.

Investors like billionaire George Soros now have the option to take advantage of Tesla's recovering share price, as the company's $920 million convertible bond due in March 2019 passed its $359.8676 conversion rate.

There's also a question of the funding Musk claims he has "secured". He also said he does not now have a controlling vote in the company and wouldn't expect a single shareholder to have one if the company were private. Public companies are companies whose shares are available for purchase by anyone on public markets like the New York Stock Exchange and the NASDAQ.

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Earlier in the day, the Financial Times reported that Saudi Arabia's sovereign wealth fund, overseen by Crown Prince Mohammed bin Salman, has built an undisclosed stake of between three and five per cent stake in Tesla. Musk, 47, has already pledged some of his shares of Tesla's common stock to secure bank borrowings, according to a June 2018 filing.

Around 1:00 pm today, Musk issued a string of tweets about abandoning the company's public listing and taking the company private at $420 Dollars a share.

"Musk does not want to run a public company", said Gene Munster of Loup Ventures, as Tesla's ambitious mission makes it "difficult to accommodate investors' quarterly expectations". Others interpreted the tweet as a joke, in specific Musk's reference to "420": a popularized reference to the consumption of cannabis by the marijuana culture.

"As the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company", Musk said. The stock, then trading at about $342 per share, shot up to $367.25, before trading was halted at 2:08 p.m.

For current shareholders, Musk said he would institute a provision ensuring that their stock be converted into private shares, adding he would 'ensure their prosperity in any scenario'.

Earlier today, I announced that I'm considering taking Tesla private at a price of $420/share. "His mission for Tesla (to accelerate the globe's adoption of sustainable energy) is both grand and long-term, making it hard to accommodate investors quarterly expectations".

In his letter to employees, Musk also pointed to pressure from short sellers as a major downside to being a public company.

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