Tesla stock surged about 11 percent Tuesday after a tweet from Elon Musk's account announced the company could go private at $420 per share.
Many people have questioned the legitimacy of the tweet, as the “$420” figure has become synonymous with weed culture. Did the Tesla CEO get hacked again? Is this another one of his online pranks? Or is he truly considering taking the company off the public market?
Well, it seems the billionaire was serious. In a company email obtained by Electrek, Musk addressed his tweets and the reasoning behind the potential move.
“First, a final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best,” he wrote. “This proposal to go private would ultimately be finalized through a vote of our shareholders. If the process ends the way I expect it will, a private Tesla would ultimately be an enormous opportunity for all of us. Either way, the future is very bright and we’ll keep fighting to achieve our mission.”
In subsequent tweets, Musk claimed he had no intention of selling Tesla stock if he actually went through with the move. Musk also reassured everyone he would remain the company’s CEO, and said he hoped all Tesla investors would stay with the company if/when it went private.
This isn’t the first time Musk has expressed his interest in taking the electric car giant off the public market: “I wish we could be private with Tesla,” he said in a 2017 interview with Rolling Stone. “It actually makes us less efficient to be a public company.”
Shares of Tesla reached as high as $371.15 Tuesday after it was reported that Saudi Arabia acquired a $2 billion stake in the company, making it the company’s largest shareholder. According to The Washington Post, Tesla shares were halted at around 2 p.m. ET Tuesday “in advance of pending news.” Trading resumed nearly two hours later, with shares reaching up to $381.
Many financial experts raised concerns over the legality of Musk's tweets.
“What occurred here is highly unusual,” Former SEC Chairman Harvey Pitt told TheStreet. “If this were solely an effort to artificially move the price of the stock, it would be manipulative. And if the claims aren't true, it would be fraud.”
Tesla’s current market capitalization is about $60 billion. If the company did go private at $420 a share, Bloomberg reports its valuation would increase to approximately $82 billion including debt.
