Tesla’s stock shot up sharply today after the company’s billionaire CEO, Elon Musk, tweeted that he was considering taking Tesla private at a price of $420 a share.
“Funding secured,” he wrote.
When the tweet-sized bombshell hit, Tesla’s stock was already trading higher thanks to reports that a Saudi investment firm had amassed a 3 to 5 percent stake in Tesla. Prices seesawed in the range of $360 to $370, representing a roughly 7 to 8 percent rise, while investors tried to decide whether Musk was joking.
It didn’t help that some interpreted $420 as a veiled reference to 4-20, which is a magic number for marijuana users. At $420 a share, Tesla’s valuation would be in the range of $72 billion.
When NASDAQ trading was stopped, Tesla’s shares were at $366.94, a 7.3 percent gain. When trading resumed, prices reached beyond $380 but ended the trading day just below that mark, adding up to a rise of nearly 11 percent over the previous day’s close. The gap between $380 and $420 reflects market uncertainty over whether the deal will go through as described.