BREAKING: Tesla suspends shares after chief Elon Musk’s tweets
Tesla chief Elon Musk stunned investors Tuesday when he tweeted that he was considering taking the company private, sending its stock soaring more than 7 percent before trading was halted.
Musk said he had “funding secured” to take the all-electric automaker private at $420 a share, far above its current $360 stock price. That would value the company — already the United States’ most valuable automaker — at more than $70 billion.
Tesla shares were halted around 2 p.m. in advance of pending news.
Musk’s tweet was an exceedingly rare way to break potentially monumental news. Public companies often halt trading in their stock and file official releases before making similar statements so as to minimize market jolts and abide by guidance from the Securities and Exchange Commission.
The sudden announcement gained immediate criticism from former regulators who suggested it may conflict with SEC rules for market-moving statements. Harvey Pitt, a former SEC chairman, told CNBC on Tuesday that Musk’s tweets “might constitute fraud if any of the facts he disclosed are not true” or if there was any indication he had floated the proposal purely to boost the stock price.
The company did not respond to requests for comment.
But Musk continued to tweet, adding, “I don’t have a controlling vote now & wouldn’t expect any shareholder to have one if we go private. I won’t be selling in either scenario.” (Musk owns approximately 20 percent of Tesla.)
Musk said there would be “no forced sales” of stock and that it “will be way smoother & less disruptive as a private company,” adding that it would end “negative propaganda from shorts.” Musk also responded “yes” when a Twitter user suggested taking the company private would save “a lot of headaches.”