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IPFS News Link • Business/ Commerce

Has Tesla CEO Elon Musk Engineered The Short Burn Of The Century?

• https://insideevs.com, BY CARLO OMBELLO

By now, everybody knows Tesla's CEO set Twitter and financial media on fire last Tuesday as he revealed his plan to make Tesla private, withdrawing it from the stock market at a guaranteed $420 per share, or 20% over the price at the time of the announcement. Importantly, Musk also clarified that funding for the buyout is already "secured": a crucial, jaw-dropping detail which implies tens of billions of dollars would be ready to change hands should the deal go ahead.

Such a bombshell announcement could not go unnoticed, as was the case for last week's anticipated Q2 earnings call that saw Tesla shares skyrocket by about $50 in one day to ~$350. Musk's Twitter following is over 22 million people, which means within seconds – via smartphone notification – I knew, journalists knew, everybody knew. The stock market reaction was wild, as could be expected, sending shares near all-time highs just below $380 by day end, after dramatic trading hours and a temporary suspension.

The jump was also helped by prior news from the Financial Times on the same day about Saudi's recently acquired stake of 3-5% in the company, seen as a big sign of confidence in the company (could the two consecutive news be related? too early to say). It's just the latest chapter in the years' long poker game that has seen Musk winning several hands against Tesla shorts, but with no final knock-out. This time though, we may be witnessing its final stages as Elon goes all-in on his challenge to shorts. Given the stakes at hand, it's hard to anticipate an outcome that won't see either party compromised in the end.


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