Tesla Stock Yo-Yos Amid Buyout News and Elon Musk Updates

August 21, 2018

3 min Read

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Tesla has been publicly traded since 2010.
On Aug. 1, the electric car company released its Q2 2018 earnings report, showing a loss of over $717.5 million.
Tesla stock experienced a jump and a dive, respectively, following announcements from CEO Elon Musk about possibly taking Tesla private and after his emotional New York Times interview.

On Aug. 1, the Tesla Q2 2018 earnings report revealed the electric car company had lost over $717.5 million in the period ending in June. But at one point in after-hours trading, Tesla stock was up more than 10 percent, according to CNN Money. Tesla reported it had $2.2 billion in cash and cash equivalents.

Less than a week later on Aug. 7, Musk announced via Twitter that he was considering taking Tesla private at a price of $420 per share. At that price, a Tesla buyout would cost $71 billion — the biggest buyout in U.S. history, according to CBS News. Tesla’s CEO said current investors would get folded in through a “special purpose fund.” The announcement caused Tesla shares to go up more than 7 percent for the day, the New York Times reported.

Click to find out the surprising reasons these huge public companies went private.

As a private company, Tesla would no longer be required to report quarterly earnings. “As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders,” Musk said in an announcement to Tesla employees. And in fact, Tesla’s stock price did fluctuate throughout the day based on Musk’s tweets.

Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018

Learn About: Strange Business Practices of Tesla, Amazon and Other Companies

On Aug. 13, Musk revealed that he was working with Silver Lake and Goldman Sachs on taking Tesla private. In a blog post, Musk said that on numerous occasions, the Saudi Arabian sovereign wealth fund had expressed interest in taking Tesla private. Musk also said that it would be “premature” to ask anyone to decide whether the company should go private, and that details of a privatization plan would be provided when the time came for the decision to be made. The Saudi Arabian fund had already purchased nearly 5 percent of Tesla stock through the public markets, Musk said.

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I’m excited to work with Silver Lake and Goldman Sachs as financial advisors, plus Wachtell, Lipton, Rosen & Katz and Munger, Tolles & Olson as legal advisors, on the proposal to take Tesla private
— Elon Musk (@elonmusk) August 14, 2018

On Aug. 14, the company announced that its board of directors had created a special committee to consider Musk’s idea, but said that it had not yet received a formal proposal from Musk.

By Aug. 17, a day after Musk’s New York Times interview was published, Tesla stock was down more than 20 percent since the day Musk announced via Twitter that he had secured funding for a private takeover of Tesla, CNN Money reported.

“The worst is over from a Tesla operational standpoint,” Musk told the New York Times in the interview. “But from a personal pain standpoint, the worst is yet to come.”

Find Out: Elon Musk’s Net Worth

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