Tesla stock jumps 10% after trading halt

Tesla stock jumps 10% after trading halt

The 11 percent jump in Tesla's stock price following Musk's public musings on possibly buying the company from existing shareholders drove $2.3 billion of convertible debt past the level at which investors can swap them for stock at a profit.

Musk has also clashed repeatedly with critics, especially investors who have taken short positions on the stock, meaning they benefit when the price falls.

Tesla's CEO also laid out what he envisions as the ideal path for going private.

In recent months, Musk has been unpredictable and defiant in the face of concerns that Tesla is running out of cash and overextending itself as it races to hit production goals for the Model 3.

"I fundamentally believe that we are at our best when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we're all trying to achieve", he wrote.

That came shortly before 3:30 p.m. when Tesla published an email that Musk sent to company employees, saying thatno final decision on taking the company private had been made and that it would ultimately be left to shareholders.

He added that he hoped all shareholders would remain and that all Tesla employees would "remain shareholders of the company".

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The tweet spurred a rush of trading in Tesla's options, driving volume to 500,000 contracts, more than twice the daily average, according to options analytics firm Trade Alert. Mr Musk's offer is 9 per cent higher than Tesla's peak closing price of $US385 reached almost a year ago.

The only problem? Those rumors were seeded, very publicly, by Musk himself, who announced his thoughts on Twitter ― and went so far as to set a prospective buyback price of $420 and promise he had the funding "secured".

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.

Taking Tesla private would certainly qualify.

But earlier in the day, the Financial Times reported that Saudi Arabia's sovereign wealth fund, overseen by Crown Prince Mohammed bin Salman, has built an undisclosed stake of between 3 and 5 percent stake in Tesla. The company did not immediately respond to a request for comment on the likelihood that it will go private, potential timing for doing so, or the funding sources Musk referred to.

It is probably worth mentioning that at the time of writing (Aug. 7, 2018, 4:30 pm EDT), Musk is $1.5 billion richer than he was 5pm EDT just the day before.

"This has nothing to do with accumulating control for myself", he said. The company is now valued at just over $60 billion, with Musk holding an nearly 20 percent stake in the company.