Cosmic Log
Tesla shares fell by as much as 6.5 percent today after Bloomberg News reported that the electric-car company was the subject of a criminal investigation by the Justice Department, focusing on CEO Elon Musk’s claims that he had secured the funding to take Tesla private.
The “funding secured” comment, posted on Twitter on Aug. 7, has also sparked increased scrutiny for civil action by the Securities and Exchange Commission.
Tesla share prices took a hit amounting to as much as 10 percent today, after billionaire CEO Elon Musk took a hit off what looked like as a marijuana stogie during a YouTube talk show. The controversial electric-car company was also hit with the departure of two key executives.
First, about that joint: The toke came in the midst of Musk’s appearance on “The Joe Rogan Experience,” hosted by Rogan, a stand-up comedian, reality-TV star and martial-arts commentator who’s built up a huge following for his video podcast. As of midday today, more than 1.6 million users had checked out his chat with Musk.
The 2.5-hour chat touched upon a wide range of topics — including the Boring Company’s foray into tunneling and flamethrowers, his long-running concerns about artificial intelligence, his vision to merge brains with software through the Neuralink venture, his plan to use SpaceX’s yet-to-be-built BFR rocket for suborbital point-to-point travel, and his idea for an electric-powered airplane that takes off vertically and would be capable of supersonic speeds.
But when Rogan lit up a joint more than two hours into the interview, it was the puff of smoke that sparked headlines.
After Tesla CEO Elon Musk got emotional during a market-moving interview this month, Amy Nelson, CEO and founder of The Riveter, says she can understand the kind of stress he’s under.
“You’ve got a few more years of running a company under your belt, but trust me: I feel your pain,” Nelson, one of the leaders in Seattle’s community of female business founders, wrote last week in an essay posted on Forbes’ website.
The essay addressed a follow-up question sparked by Musk’s candor about the stresses of running a company: Can women CEOs afford to be as candid as Musk was? Nelson’s take: They can’t.
After more than two weeks of discussions, Tesla CEO Elon Musk says feedback from shareholders and experts has convinced him that “the better path is for Tesla to remain public” rather than becoming privately held.
Musk stirred up the financial world on Aug. 7 when he said he was considering a plan to buy up the electric car company’s publicly traded shares at a premium price of $420 a share. A major source of controversy was Musk’s claim that funding had already been secured for what could have been a multibillion-dollar stock purchase program.
The “funding secured” tweet drew skepticism from stock analysts and heightened scrutiny from federal regulators.
In tonight’s update to Tesla’s website, Musk said that most of Tesla’s existing shareholders wanted the company to remain public, and that going private could have forced some institutional investors to divest their stakes. Retail investors might have been forced to sell their stock due to limits on the number of shareholders allowed for a privately held company.
“The sentiment, in a nutshell, was ‘please don’t do this,’ ” Musk wrote.
On the heels of Elon Musk’s angst-filled, market-moving interview with The New York Times, YouTube techie Marques Brownlee offered up lighter, brighter fare from a one-on-one chat with the Tesla CEO at his electric-car factory in Fremont, Calif.
Musk discussed the wonky side of vehicle production and the prospects for building cars in the same price range as, say, a Toyota Prius (which is the top trade-in for the more expensive Model 3).
“Getting to, like, a $25,000 car — that’s something we could do,” Musk told Brownlee. “If we work really hard, I think maybe we could do that in three years, four years.”
When Tesla CEO Elon Musk chokes up, Tesla’s stock price gets depressed as well.
The link between public perceptions of the tech billionaire’s mental state and the financial state of his publicly traded company was evident today, in the wake of a New York Times interview that quoted Musk as acknowledging he was fraying.
“This past year has been the most difficult and painful year of my career,” Musk told the Times. “It was excruciating.”
Today’s trend line for Tesla’s stock was excruciating as well, with a nearly 9 percent drop to $305.50 a share.
When Tesla CEO Elon Musk said he had “funding secured” for a plan to take the company private, he was referring to the Saudi Arabian sovereign wealth fund — whose executives had been pressing him for almost two years to take such a step.
That’s according to an update that Musk posted to Tesla’s website today. The update sheds more light on Aug. 7’s cryptic and seemingly sudden tweets revealing that he was considering a plan to buy up shares from whoever wanted to sell, at a premium price of $420 a share.
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.
Tesla reported a larger loss per share than expected in the second quarter, but there was more revenue and less of a cash burn than expected — all of which resulted in an after-hours surge in share prices that at one point amounted to more than 10 percent.
There were less quantifiable factors as well, in the form of apologies from Tesla CEO Elon Musk for his behavior three months earlier.
Musk had dressed down Toni Sacconaghi, an analyst for the Sanford C. Bernstein investment management firm, during the previous quarter’s conference call for asking what the billionaire techie called “boring, bonehead questions.” He also had complained about a “dry” question from RBC Capital Markets’ Joseph Spak.
During today’s call, Musk apologized to both analysts.
Just days after promising he’d make Tesla profitable within months, CEO Elon Musk announced today that 9 percent of the company’s workforce is being laid off as part of the effort to make it so.
Musk tweeted out his memo to employees, laying out the reasons for the layoffs.
He said the “difficult but necessary” decision was the result of a comprehensive organizational restructuring, targeting duplication as well as some job functions that, “while they made sense in the past, are difficult to justify today.”
“Given that Tesla has never made an annual profit in the almost 15 years since we have existed, profit is obviously not what motivates us,” he wrote. “What drives us is our mission to accelerate the world’s transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable. That is a valid and fair criticism of Tesla’s history to date.”