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Elon Musk tweets proposal to take Tesla private for $420 per share

Updated Aug 7th, 2018 2:19PM EDT
Tesla share price, Elon Musk tweet wtf

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Early on Tuesday afternoon, Elon Musk’s official Twitter account sent a tweet suggesting that Musk was going to lead a private buy-out of Tesla’s stock for $420 per share. If the tweet is serious (and not the work of hackers or a particularly wild night on the factory floor), it would allow Tesla to go private and inject some much-needed capital into the company.

“Am considering taking Tesla private at $420. Funding secured,” Musk’s account tweeted. Shares in Tesla were up sharply following the tweet, trading at $363 at the time of writing. Much of that increase was driven by an earlier report that Saudi Arabia’s sovereign wealth fund has bought $2 billion in Tesla stock, representing a 3-5% stake in the company.

A company’s CEO announcing a propsed buy-out on Twitter before notifying shareholders would be unusual in the extreme, which is driving caution among traders. However, given Musk’s lack of concern for industry norms and his ongoing feud with short-sellers, it’s not out of the realm of possibility. The fact that the tweet gives a specific price, and that $420 is a long-standing marijuana in-joke, makes it even more possible that this is a hoax or Musk’s idea of a joke.

$420 per share would be a significant premium on where Tesla is currently trading, and also its performance over the first half of the year. The stock’s past-year high was $389.61, with it trading as low as $244.59 in April. A share premium in a buy-out is common, so the $420 number isn’t out of the realm of possibility.

Musk seemed to double-down on the mystery with a follow-up tweet 25 minutes later reaffirming the price:

Tesla spokespeople have not yet confirmed the proposal to any media outlets, but in a series of follow-up tweets, Musk has outlined how the plan would work:

Chris Mills
Chris Mills News Editor

Chris Mills has been a news editor and writer for over 15 years, starting at Future Publishing, Gawker Media, and then BGR. He studied at McGill University in Quebec, Canada.