Controversial Tesla chief executive Elon Musk said Tuesday he was considering taking the company private, sending shares sharply higher before trading was halted. Before Musk's tweet, Tesla had a market value of $58 billion, already higher than that of General Motors or Ford, even though those companies are significantly larger and more profitable. (Musk said in his Tesla blog post that he held a 20 percent stake.) He said that if the plan goes forward, shareholders would cast the deciding vote.
"In 2013, the SEC made it clear that people could use social media to disclose significant information about their companies, but they had a caveat, which is people need to know where to look", Pitt said.
During a conference call in May, Mr. Musk shut down questions from analysts, calling them "boring" and spent much of the time talking to an investor who runs a YouTube channel, prompting an after-market sell-off of Tesla's shares.
In fact, Tesla has turned a narrow profit in only two quarters since it became a public company in 2010. The buyout is good for a 20 percent premium over the current market price of the stock and would value the company at over $70 billion dollars at current numbers of outstanding shares.
Tesla did not immediately confirm if Musk himself sent the tweet or if it was the result of a hack.
Shares in Tesla hit $367.25 after a message posted at 9.48am NY time on Mr Musk's verified Twitter account said: "Am considering taking Tesla private at $420". The CEO said shareholders would have the final say if he decides to follow through on going private, and that he would stay in his job.
Investors may be wondering what Elon is smoking this morning following a tweet in which he claimed he's considering taking Tesla private at $US420 ($566) per share. With $2.2 billion in cash on hand at the end of the second quarter, Tesla would have enough to operate until the end of the year.
Mr Musk has had feuds with regulators, critics and reporters, and questions remain about Tesla's production and manufacturing difficulties, long-term demand for its cars and uncertainty over funding.
Musk has previously discussed possibly going private as a means to realise long-term growth and accomplish a goal that some Tesla acolytes embrace with near-messianic passion. I think he's serious.
In his letter to employees, Musk also pointed to pressure from short sellers as a major downside to being a public company.
The news caused Tesla's share price to jump by $14.
Whether Musk's tweet was ethically proper or not, all of the experts interviewed by FOX Business agree the move was unprofessional at best.