Tesla Stock’s Surge Puts Convertible Bonds in the Money

Tesla Stock’s Surge Puts Convertible Bonds in the Money

Mr Musk got the ball rolling Tuesday after the stock market had already been open more than three hours with a tweet announcing he had secured funding to buy all of Tesla's stock at $US420 ($566) per share with no further details.

CEO Elon Musk said on Twitter Tuesday that he's thinking about taking Tesla private, sparking a rally in the company's shares.

A buyout at US$420 per share probably won't let Musk reap any benefit from the US$2.6b stock option grant he received this year.

Taking Tesla private "makes a ton of sense", said Gene Munster, a managing partner at venture capital firm Loup Ventures.

Former SEC chairman Harvey Pitt spoke up about the matter to CNBC, noting that Musk's tweet "might constitute fraud if any of the facts he disclosed are not true" or if there's any indication that his tweet was sent for the objective of boosting Tesla's stock price by soliciting investor hope. The California auto maker has burned through US$1.8-billion in the first half of 2018 and is among the most-shorted stocks on the USA markets.

On the social media platform he noted the possibility of taking Tesla - a publicly traded company since 2010 - private. Tesla shares rose as much as 13 percent before ending the day up 11 percent.

He also said that he would hold on to his almost 20% stake in the company if it were taken private, and that he wouldn't expect himself or any other investor to have a controlling vote after the buyout.

Tesla reported its biggest quarterly loss ever last week, saying in its second-quarter earnings report that the carmaker lost more $717 million on $4 billion in revenue.

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"Being public means that there are large numbers of people who have the incentive to attack the company", he wrote. The stock had been worth about $342 a share before Musk's tweet, and shares quickly jumped as high as $371.

While Mr Musk has previously discussed the drawbacks of being a public company, he has also used his Twitter account in ways that surprised investors.

Galileo Russell, founder of HyperChange TV and an outspoken supporter of Musk and Tesla, said in an interview on Cheddar he doesn't want to sell his shares.

Tesla CEO Elon Musk says he is considering taking the electric vehicle maker private.

Earlier in the day, Tesla shares had worked their way on word of a new stake in Tesla from the Saudi Arabia sovereign wealth fund, according to Financial Times. He also notes that Tesla would likely go public in the future after entering a "phase of slower, more predictable growth".

At $420 per share, it would cost about $71 billion to take Tesla private.

"This has nothing to do with accumulating control for myself", he said.

But time and again Musk and Tesla have been given more time to achieve success.

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