By on August 7, 2018

Elon Musk

Tesla may be going private, according to a Tuesday message from Elon Musk’s Twitter account. “Am considering taking Tesla private at $420. Funding secured,” the CEO wrote. “Good morning,” 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 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,” 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 we’re private. Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelity’s SpaceX investment.”

Meanwhile, 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, which — gasp — isn’t in the morning at all!

Of course, Musk lives on the West Coast — 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 make — assuming that’s even what happened.

At the suggested price of $420 per share, Tesla would be worth roughly $71.7 billion — about 18 percent higher than its current market value. However, the gap began to close after Musk’s announcement and shares shot up nearly 6 percent before being halted at $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. 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]

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49 Comments on “Tesla Trading Halted After Musk Mentions Taking Company Private – at $420 a Share...”


  • avatar
    Sub-600

    I think his hair plugs are too tight. What a clown.

  • avatar
    R Henry

    I think Musk is bored with making cars. It’s hard and not much fun for him. He wants out so he can play with rockets and tunneling toys.

  • avatar
    stingray65

    $71+ billion for a company that has never made a profit, has major production problems, poor quality reputation, is about to lose EV buyer subsidies from the Feds, and is getting new EV competitors from prestige brands on almost a daily basis – who wouldn’t want such a bargain.

    • 0 avatar
      Lockstops

      …and how much debt right now?

      • 0 avatar
        Lockstops

        I swear that a brand new, from-absolute-scratch car company which was established today by a dozen top industry professionals, with a model of outsourcing production would be in a considerably more promising position than Tesla with the massive debt and other BS it has hung itself on.

        How can people call a company a ‘start-up’, ‘entrepreneurial’, ‘nimble’, or able to in any way threaten proper, knowledgeable, established companies with 10 billion in debt??? As I said, a company started today would be more promising than Tesla.

        • 0 avatar
          SCE to AUX

          BS. What would they build – a Camry killer?

          Come on, the number of car brands has been shrinking because the market is saturated with boring choices. Consider what happened to Saturn, Saab, Pontiac, Hummer, Oldsmobile, Mercury, and Suzuki recently.

          No, a new car company has to produce something fresh and interesting – and Tesla has certainly done that.

          Your mythical car company would be run by tired car execs from the old guard, and they’d end up bankrupt in 5 years.

          • 0 avatar
            Lockstops

            What unique, unreplicable stuff does Tesla have that another company can’t produce? Yeah, there is nothing that Tesla does that others can’t also do. Except of course other companies can’t just take billions of clueless investor money and flush it down the toilet, but that’s beside the point as I’m talking about product-related stuff.

            For instance a dozen execs from Tesla could start a new company and that might well be in a much better position than Tesla.

            Haha, you actually called Tesla’s products fresh and interesting!!! Two extremely old models, one a car (who buys cars nowadays?) which were originally designed with the most radical cost saving strategy ever, making them such short-cut cheap-o monstrosities that it defies belief! Then your ‘fresh and interesting’ Model 3: yet another car in a time when overwhelmingly everyone buys crossovers. And an absolute bargain basement one at that, with not even being able to afford buttons or an instrument cluster for it! No variation, no customisation, no body styles, very limited options… Tesla was smart in knowing that Americans will buy any kind of horrible crap, and have been buying it since the 70’s. Stuff like K-cars and the like is probably what inspired Tesla to have the courage to even offer the boring, featureless, completely out-of-fasion style, horrible quality and backwards Model 3.

          • 0 avatar
            Lockstops

            “Your mythical car company would be run by tired car execs from the old guard, and they’d end up bankrupt in 5 years.”

            Tesla would’ve gone bankrupt in about that time if ‘the old guard’ wouldn’t have directly saved it from bankruptcy (Daimler).

      • 0 avatar
        EBFlex

        GM makes a profit. Tesla does not. All Tesla has is empty promises.

      • 0 avatar
        stingray65

        Big 3 – all those unique and unreplicable advantages and yet Tesla still doesn’t earn a profit.

  • avatar
    jkross22

    The only surprising part of the Tesla story is that there are still people on the wait list for the Model 3.

  • avatar
    Stumpaster

    OK, so here above we have four people who don’t own Tesla stock.

  • avatar
    EquipmentJunkie

    Best idea I’ve heard in a long time. This guy as head of a public company is like the guy screaming “Fire!” in a movie theater. I can’t believe that he didn’t have the SEC breathing down his neck.

    The EV market will soon be flooded with competition…from proven manufacturers. When EVs take off, those companies will succeed. The Tesla loyalists will be busy crafting their screenplays for Elon Musk, the movie. “He was just too brilliant for the mainstream…a victim of Big Oil and the jealous.”

    • 0 avatar
      raph

      I chuckle every time I think about some point in the future where Tesla and Musk will be compared to Tucker and how big oil plotted to destroy the first major domestic electric vehicle manufacturer. The icing on the cake would of course be if Musk had a chartered plane that would mysteriously disappear on the way to Hawaii or over the Rockies.

    • 0 avatar
      SCE to AUX

      Most ‘proven’ mfrs are too late, and/or they aren’t interested in losing money on EVs.

      They don’t have a Gigafactory, they don’t have any market share, and they don’t have the commitment.

      Tesla now owns the EV market – period – and it’s taken them years of careful (though flawed) execution to get there.

      In July, The Model 3 outsold *all* other BEVs combined by 4:1, with its volume set to eventually double. Tell me which mfr has the ability or the interest to meet this challenge.

      • 0 avatar
        Lockstops

        Proven mfrs have been keeping abreast with all different drive technologies for decades and decades before Tesla was ever founded.

        Yes, they aren’t interested in losing money on EVs, they are not desperate.

        They have many factories around the globe with capacity way above anything Tesla will ever get to. About market share: you clearly have no idea about EV sales statistics. They DO have market share. And once again: they don’t have a commitment to destroy their investors’ wealth just to be on the cover of a magazine, hailed as a hero for a short while before the house of cards inevitable collapses.

        Tesla does not own the EV market. Suggesting such things is deluded. They also do not gain any benefit from whatever position they are in: they have no ability to shut anyone out. Tesla doesn’t own the EV market, can’t capitalise on the puny market position it does have, has amassed 10 billion in debt totally crippling the whole company in the process, and overall the company is wrecked.

        In July, the Model 3 wasn’t even for sale in most of the world.

        I think maybe Lada has the ability or the interest to meet this challenge. They are one of the few I can think of who have basically no products on the market, are of unacceptable quality, are sold almost nowhere. They’re probably also state-subsidised pretty strongly. But even their Soviet days of being able to amass huge amounts of preorders that customers have to wait for years to get is gone. No, Tesla is pretty much alone in collecting preorders that hey don’t honor until years later, causing a temporary (local) flood of (low-quality) products which will excite morons like SCE to AUX who don’t understand that pent-up demand released is not comparable to sales numbers of steady sellers.

        • 0 avatar
          SCE to AUX

          Tell me how Tesla doesn’t own the BEV market:

          https://insideevs.com/monthly-plug-in-sales-scorecard/

          • 0 avatar
            Lockstops

            Those are sales statistics for only one of the world’s 195 (?) countries. That’s how Tesla doesn’t own the BEV market.

          • 0 avatar
            Drew8MR

            When I’m at home in the OC, Teslas are a common sight, on par with most premium+ brands. When I roll back up to Sac Town, not so much. You are only going to sell so many cars at $70K and up. Ford could refit and fire up an old line and be outproducing Tesla in 2 quarters tops.

          • 0 avatar
            JohnTaurus

            Who needs a “Tesla killer”? They’re killing themselves quite efficiently.

      • 0 avatar
        Shortest Circuit

        “Tell me which mfr has the ability or the interest to meet this challenge.”
        On the interest alone – none. No reputable manufacturer wants to stand out in public and admit that they can’t possibly recycle the old and worn batteries. Tesla deems the battery packs unsatisfactory when they lose about 15% capacity – what do you think is in the Powerwalls? Old Roadster batteries. That way they can be used down to 70%

      • 0 avatar
        I_like_stuff

        “In July, The Model 3 outsold *all* other BEVs combined by 4:1, with its volume set to eventually double”

        The EV market is 1.4% of the overall car market. Elon Mush is the leader of that niche market. He’s a genius man.

  • avatar
    PrincipalDan

    It would be great if he would start taking his meds.

  • avatar
    Lockstops

    What Musk has been doing (or trying to do) for a long time with Tesla is merely wave his massive finances around to do stunts and gain admiration. His actual competitive achievements are just about null. It’s incredible that his tactic actually seems to be dumping, even though only a complete moron would think that’ll work. I guess he didn’t think past how good it feels for him to momentarily ‘rule’ during step one of his dumping scheme! But what then? If he doesn’t use his dumping to gain a monopoly or seriously weed out all competition then all he’s done is fleeced his investors and done a bit of temporary damage to his competitors. Then again I guess he won’t care about that… He has no risk that _all_ the investors whose money he’s taken can all break his kneecaps, that’s physically impossible.

    It looks more and more like he didn’t even realise what made him feel good about his situation, that he didn’t look further than the here and now where it felt good to be able to keep growing the snowball. Of course “Hey haven’t you heard of Amazon” is another reason…him and other tech lemmings not understanding the basics, the fundamentals of business strategies and markets. Amazon weeded out enough competition, Amazon actually gained such a position to end up getting to a plateau after its dumping. Tesla had no chance in hell, as it’s completely impossible for them to bar the competition from electric car markets or subsidies. Even if electric cars could gain such a dominant position over all other technical solutions that it would determine market position…

    So yeah, dumping, meaning spewing out your products at a loss to gain such a market share and to drive out competition needs to actually get you to that power position where you regain the massive losses you take during your dumping. Now Tesla has been dumping for years and years, and will continue for years (no way it gets to competition’s levels of model lineups _and_ gains market share _and_ develops replacement models at industry leader levels, _and_ makes profits)!! And for what? What ‘dominant’ position, or any position of power is it seeing in the horizon which will enable it to not only make profits but such profits that let them recoup the billions lost all the while paying interest on that crippling debt, as they still would actually have to keep growing from the minimally small size they are now?

    There really is no intelligent plan there. It’s just opportunism and then seeing what opportunities might appear later on. It’s a guy holding a hammer and therefore seeing everything as nails. Musk has a talent for swindling capital for himself at a massive scale, and he’s just continuing to raise capital as a result of that no matter if that’s something that should be done or not. Now clearly the plan is to remove those pesky obstacles of being a publicly traded company that cramps his shyster capital raising ways. A return to even less facts (and I can’t believe he’s been allowed to lie and spin the way he has, it’s unbelievable), hide the small bits of untransparent, unreliable little data anyone got in the first place. Now he’s going full retard.

    • 0 avatar
      SCE to AUX

      You make a few good points – no doubt Tesla can’t afford to dominate a market if it loses its shirt.

      On the other hand, the Model 3 was the 7th-best selling car in the US in July, behind only the Corolla, Camry, Civic, Accord, Sentra, and Altima. Every other car you can think of sold fewer copies.

      If the Model 3 is profitable (and there are thoughtful arguments that it is), then Tesla really will make up their other losses with Model 3 volume. The Model 3 has always been the goal, and they’ve made it clear that the company can’t succeed on low volume.

      • 0 avatar
        Lockstops

        It has already been repeated several times on this site’s comments you most probably have not missed it: Model 3 local sales numbers after several years of holding back deliveries has nothing to do with normal sales statistics and is absolutely not comparable in any way to normal sales numbers of companies that have consistently delivered products to their customers over the several years that Tesla kept their customers waiting, and without vehicle.

        So please stop the dishonest, absolutely erroneous claims. I will go even harsher if you and that certain other Tesla shill keep up the despicable lies.

        • 0 avatar
          mcs

          @lockstops: Sales statistics are sale statistics. There was a waiting list for the car and to be honest I’m kind of surprised it was as large as it was and that people have hung on to actually ordering the car. And it was a waiting list. No one actually ordered a car. You can’t hold back deliveries on something that hasn’t been ordered.

        • 0 avatar
          Guitar man

          A. They open up sales to the rest of the world That’s right – you can only get a Model 3 in the US and Canada now. Just wait until Europeans and Asians get a shot at it.

          They are sold throughout the world, including Europe and Asia. Norway uses them for taxis, or did until the plate owners went on strike because of the mechanical problems.

    • 0 avatar
      NG5

      Helpful straightforward summary. That and your other comments about pent up delivery demands are helpful for keeping perspective. Tesla and Musk probably deserve some credit simply for their branding and marketing successes, though this may be a result of what one can do with products while burning cash at an incredible rate. See Uber’s low fares, for example, which to my knowledge were (maybe still are?) subsidized by shareholders.

      The question I have is whether the company can trade on hype long enough to sell very high margin cars, and whether increased opaqueness from going private could allow them to cheap out and balance debts more quickly. In other words, if one wanted to sell a cheap car for a high price, how much of an obstacle would public trading of the company present to that goal? I’m thinking specifically of the way Ford’s announcements to discontinue selling cars in North America (a shareholder disclosure, right?) totally tanked their sales.

      • 0 avatar
        Lockstops

        What I think is a main point is that how is Tesla’s bumbling around with their two very basic models’ (of which one has a second body style) production any way to get the company to a position of power over the competition?

        They have zero ways to form barriers into the EV market. The EV market WILL be filled by the established players at least once that becomes profitable and they even want to enter it. Tesla is nowhere near the competition in volume, especially in flexible product lines which allows the competition to produce about ten times the amount of body versions Tesla can not to mention the probably thousand times wider variation in customisation, equipment etc. Tesla has no quick way to get anywhere near the standard of tech, design or production. I went a bit off topic there: basically there is nothing Tesla can do to block others, and they have no other real USP:s that can’t be matched by others. They have no weapons in the marketplace except maybe some in marketing, and actually in that department they also lack many things.

        If Tesla merely almost matches the competition over the next 10 years, how is that a position where they will get some extraordinary profits to cover the spent capital and handle their massive debt? Cheaper just to buy an existing company…or use that raised capital to develop concept and prototype cars and only then go into production when your product is good enough, profitable enough and your manufacturing sorted out or just outsource the production. That way there won’t be that black-hole-level-spending on unprofitable factory production. Problem is that Tesla probably never would’ve come up with any unique tech that others can’t also do. So they would’ve even then only become an also-ran, though with less losses in the first years. No, the only main strength of Tesla is capital raising ability.

      • 0 avatar
        JohnTaurus

        Getting off topic, but…

        “I’m thinking specifically of the way Ford’s announcements to discontinue selling cars in North America (a shareholder disclosure, right?) totally tanked their sales.”

        Their announcement didn’t cause the sales decline, it was because of the sales decline, which has been going on for quite a while. Even the Camry and Accord (both all-new products and, at least with Accord, having glowing reviews) are now facing declines, and you can’t possibly blame that on Ford’s announcement.

        The fact that Ford’s car sales are off and truck/utility sales are up (and up quite a bit, although not enough to offset falling car sales, as was the case with every other manufacturer aside from Jeep and FCA) would be the reason why they are pursuing such a strategy.

        In short: The announcement wasn’t the cause, it was the effect. Falling car sales (and profits) are the reason, not the result, of the change.

        • 0 avatar
          NG5

          Plausible argument, but the announcement could still have compounding effects on top of industry wide declines which motivated their decision. Counterfactually a good comparison would be to see if their sales had fallen more severely than a company which is still dedicated to producing cars did. I didn’t take the time to compare in that way because I was just making a point about the potential effects of shareholder disclosures. Perhaps the example was not a good choice, but it was fresh in mind anyway…

        • 0 avatar
          EBFlex

          It absolutely caused them to lose sales.

          Announcing that sonearly will be one of the greatest PR blunders if all time.

          But then it’s ford so its not surprising.

    • 0 avatar
      JohnTaurus

      Thank you for taking the time to make sense.

      I’d buy you a beer if I could, sir.

  • avatar
    RRocket

    Oh the irony….Tesla is about to be bought by what is essentially Big Oil.

    • 0 avatar
      mcs

      I’ve been investing in battery technology, but I’m hanging on to my oil investments. There will still be plenty of uses for oil like lubricants, composite/plastic stuff, and for the polymer based electrolyte in solid state EV batteries.

    • 0 avatar
      RRocket

      90% of their riches is oil and petroleum by-products. Those are the current numbers.

      The irony is: for many years, Musk often talked about “big oil” conspiring to hurt his company. And now he’s selling out to them!

      Irony and hypocrisy go hand in hand apparently.

    • 0 avatar
      JohnTaurus

      Or maybe because the U.S. has finally taken the chains off its own oil, which has significantly reduced their stranglehold on the market? Nahh. Must be that they see no oil use in the near future, because, ya know, petroleum products aren’t used in the production of EVs. They’re made from pixy dust and unicorn farts.

  • avatar
    28-Cars-Later

    You can’t make this sh!t up.

    I said it last year and I’ll say it again, the fix is in on TSLA as he’s got deep, deep pockets behind this.


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