Tesla may be going private, according to a Tuesday message from Elon Muskâ€™s Twitter account. “Am considering taking Tesla private at $420. Funding secured,” the CEO wrote. “Good morning,â€� he said immediately afterward, accompanying the message with the smiley face emoji.
What followed was rampant media speculation as to whether Musk was in his right mind or not, while Musk continued responding to questions online.
“I donâ€™t have a controlling vote now wouldnâ€™t expect any shareholder to have one if we go private. I wonâ€™t be selling in either scenario,” he said after being asked whether it would be an outright sale and if he could retain control of the company. “My hope is *all* current investors remain with Tesla even if weâ€™re private. Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelityâ€™s SpaceX investment.”
Meanwhile,Â CNBC and a few other news outlets noted that the number 420 has a special significance in the marijuana-smoking community and that Musk’s good-morning tweet was issued at around 1:30 p.m. Eastern, whichÂ â€” gaspÂ â€” isn’t in the morning at all!
Of course, Musk lives on the West CoastÂ â€” where it would still technically be the morning and cannabis laws are pretty lax. If Elon woke up late, smoked a “jazz cigarette,” and set shares at a price point he found hysterical, that’s his business. Still, a THC-induced stock announcements is not the most prudent decision for a CEO to makeÂ â€” assuming that’s even what happened.
At the suggested price of $420 per share, Tesla would be worth roughly $71.7 billion â€” about 18 percent higher than its current market value. However, the gap began to close after Musk’s announcement and sharesÂ shot up nearly 6 percent before being halted atÂ $367 per share at 2:00 Eastern.
Which begs the question, did Elon break the law by not issuing some kind of warning to existing shareholders? Musk makes statements via Twitter all the time and has millions of followers, so it could be argued that any tweet issued is tantamount to an official announcement. But that’s not the way things are traditionally done. Likewise, if there is no financing in place, it could be argued that the CEO made a false claim that artificially boosted share prices. That could net him some legal ramifications.Â The U.S. Securities and Exchange Commission is likely to weigh eventually, so we’ll keep you updated.
Musks’ latest tweets claims going private will eliminate the “negative propaganda” associated with short sellers. He also confirmed investor support, adding that the only uncertainty is that everything remains contingent on a shareholder vote.
[Image: Tesla Motors]