CEO Elon Musk, CEO TESLA once mentioned that he had a buyer who would take Tesla industries private at $420 a share. This never actually happened until the stock market got itself there on its own.
Elon Musks tweet in August 2018 said that he was considering taking Tesla private and that the funding for this venture was completely secure. At that point in time, the price per share was $379.57, which was nowhere in the vicinity of $420. There was increasing speculation bout the identity of the mystery buyer and several investors were of the opinion that Musk was making a joke since the number “420” has now come to be related to Cannabis culture.
The reference was not lost on CEO Musk as he joked about it and quoted it on Monday.
Soon after his tweet, Musk informed the media that Saudi Arabia’s sovereign wealth fund had come to him with propositions more than once in order to buy the company, but at the end of August last year, he said, “I believe the better path is for Tesla to remain a public entity”. This was announced soon after he met with the board for Tesla Industries.
Musk’s tweets got himself in trouble with the Securities and Exchange Commission and also with his investors. The tweets were potentially “misleading investors and shareholders” even though he never actually secured the funding that would take the company private. Musk paid the regulatory settlement fee of $20 million in October 2018 as he gave up his position as Chairman as well.
Tesla’s shares were majorly affected after the news of the potential private ownership broke out. In this year itself, it rose to about 27%.
On the day of the announcement itself, the shares rose to up to 11% even after trades were stopped for more than an hour. However, they never approached $420 as shareholders began to get skeptical.
Nearly a year and a half later, Tesla may still not have a potential buyer, but on Monday, at the beginning of holiday break, the shares finally plummeted to $420. It was an all time high for the stocks, marking a surprising end to the year.
Tesla announced new vehicles in 2019 such as the Cybertruck, an all electric ATC and the most important, Model Y. Beginning production in 2020 with factories opening in China and Germany, the competition in the electric car market has been growing intense.
The year started with a $700 million loss but crawled back into profitable territories in the third quarter. However, 2019 on a whole, is expected to be a year of loss for Tesla Industries.