Tesla share trading halted after Musk tweet boost

Tesla share trading halted after Musk tweet boost

Tesla share trading halted after Musk tweet boost

Tesla resumed trading on the Nasdaq exchange after a almost two-hour pause on Tuesday afternoon, shortly after the company confirmed in a blog post that CEO Elon Musk is considering taking the electric auto maker private at $420 per share.

At $420 per share, it would cost about $71 billion to take Tesla private. "Funding secured", Musk said. Musk tweeted that early access would have bugs and was not advisable since there would have to be a plan for something to go wrong.

Tesla shares closed up 11 percent at $379.57, slightly below their all-time high. The company had a market value of $58bn as of Monday's close.

Musk is Tesla's largest shareholder, with an approximately 20 percent stake valued at about $12 billion, according to S&P Capital IQ.

But former SEC Chairman Harvey Pitt told CNBC he saw problems with Musk's tweets, noting that the mention of a go-private price is "highly unprecedented ... and raises significant questions about what his intent was".

Since Tesla went public in 2010, its stock has been on a roller coaster ride, gaining nearly 2,000 percent in eight years, but also reportedly becoming at times the most shorted stock in history.


Musk also wants Tesla's employees to remain shareholders.

When asked on Twitter whether he was serious, Musk replied: "Yes". The stock had been worth about $342 a share before Musk's tweet, and shares quickly jumped as high as $371.

Still, the tech-heavy NASDAQ exchange where Tesla is listed halted trading over the uncertainty of whether Musk's tweet may have violated any Securities and Exchange Commission rules that prevent company executives from making market-moving statements. A price of $US420 per share price would represent a 22.8 per cent premium to Tesla's closing price on Monday, which gave the company a market value of about $US58 billion. Shares are up as high as 9% on the day.

A spokesman for Tesla did not immediately return a request for comment.

Tesla has burned through cash while struggling to produce the Model 3, its lowest-priced electric vehicle. I think he's serious.

I fundamentally believe that we are at our best when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we're all trying to achieve. The automaker is also the most shorted on Wall Street, with many investors betting the company will fail.

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