Tesla call options jump on Musk tweet, short-sellers hurt

Elon Musk

Elon Musk

Tesla CEO Elon Musk shocked investors when he tweeted to his 22.3 million followers on Tuesday suggesting the electric auto maker could go private at $420 per share, while noting, "funding secured".

Tesla is the most valuable automaker in the United States, and Musk's fights with investors - specifically short-sellers, who profit when the stock drops - are a running Silicon Valley sideshow.

"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. (Musk said in his Tesla blog post that he held a 20 percent stake.) He said that if the plan goes forward, shareholders would cast the deciding vote.

The tweets came after a report in the Financial Times that Saudi Arabia's sovereign wealth fund had taken a 3%-5% stake in Tesla, a holding worth at least $1.9bn.

"In 2013, the SEC made it clear that people could use social media to disclose significant information about their companies, but they had a caveat, which is people need to know where to look", Pitt said.

Wall Street jumped on the news, spiking Tesla stock from around $342 a share to a high slightly north of $370 in just 45 minutes.

Musk has been in a very public battle with these shorts for years.

Tesla shareholder Quint Tatro, managing director of Joule Financial, praised the idea as "brilliant", adding that "Musk is exhausted of dealing with all the challenges of being 'public'". Employees would remain shareholders, and Tesla would be independent of Musk's other company, Space X, though the structures would be similar.

Bullish on the performance and increased production of "Model 3" cars, Tesla CEO Elon Musk is now planning to introduce a mini-car.

He shared more details in a series of Twitter replies, noting that should Tesla go private, he'd remain in his role as founder and CEO of Tesla.

He said funding had been secured and that he would stay on as chief executive if the company went private.

Scottish money manager Baillie Gifford, which recently urged Musk to focus less on tweeting and more on running the business, is the fourth-largest shareholder, with a almost 8% stake.

Tesla lost US$717-million in the second quarter, its largest quarterly loss. I think he's serious.

"Given his historic frustration with short sellers, analysts and certain parts of the press, it is perhaps also not surprising that he has given consideration to taking the company private".

If that were to occur, it would be the largest deal of its type - moving the electric vehicle maker out of the glare of Wall Street as it goes through a period of rapid growth under tight financial constraints. Musk, 47, has already pledged some of his shares of Tesla's common stock to secure bank borrowings, according to a June 2018 filing.

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