Doubts about Elon Musk’s ability to take Tesla private mounted across Wall Street yesterday, wiping out the gains reaped from his initial tweet floating the idea.
The stock plunged as much as 4.6pc to $353.33, below where it was trading two days ago and well off the $420 at which Mr Musk said shareholders would be bought out.
The shares have dropped on back-to-back days after having jumped 11pc on Tuesday, when Mr Musk vowed that he had “funding secured” for a spectacular $82bn deal.
Since that initial tweet, though, he has offered no evidence to back up the statement. Nor has anyone stepped forward publicly – or privately – to say they’re behind the plan. People with, or close to, 15 financial institutions and technology firms who spoke on the condition of anonymity said they weren’t aware of financing having been locked in before Mr Musk’s tweet.
“I don’t really understand the idea of what was suggested in the potential for them to go private,” Dick Weil, CEO of Janus Henderson Group, said in an interview with Bloomberg Television. “That’s obviously an incredibly large valuation to somehow take into the private market.”
All of which could be problematic as the Securities and Exchange Commission starts investigating the matter.
Regulators have asked the company if what Mr Musk tweeted was factual and why such a disclosure was made via social media rather than in a filing, according to ‘The Wall Street Journal’, citing unidentified people familiar with the matter. Judith Burns, an SEC spokeswoman, declined to comment.
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