Tesla stock briefly hit $420 per share Monday, more than a year after CEO Elon Musk tweeted that he had “funding secured” to take the company private at $420 a share, a move which led to a federal investigation of the Tesla CEO.
The stock reached a high of $422.01 before closing Monday at $419.22, up more than 3% and bringing Tesla’s market cap to more than $75 billion. It surpassed $420 more than a year after CEO Elon Musk said he had “funding secured” to take the company private at that share price in a tweet that led to a turbulent period for both Musk and Tesla.
Musk tweeted in August last year that he is “considering taking Tesla private at $420. Funding secured.” At the time, the share price was $379.57. Since then, many buyers approached Tesla CEO, so he had to announce that Tesla would remain a publicly-traded company. The investors were nervous, nonetheless, so Tesla stock dropped about 16% over the three weeks following the tweet. It fell even lower after an infamous podcast with Joe Rogan where the billionaire inventor smoked what appeared to be marijuana during a wide-ranging interview.
The SEC then sued Musk for securities fraud because he failed to disclose the proper documents before announcing the intent to take Tesla private. The SEC sought to ban Musk from holding officer or director positions at any publicly traded company. Musk held onto his role as CEO by settling with the SEC, though he was forced to relinquish his role as chairman and pay a $20 million fine.
“This unjustified action by the SEC leaves me deeply saddened and disappointed,” Musk said at the time in a statement to CNBC. “I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way.”
After the settlement, Tesla shares jumped 17.35% to $310.70, but the stock turned south again days later when Musk mocked the SEC in a tweet, calling the agency the “Shortseller Enrichment Commission” and later again when Tesla announced it would cut 7% of its workforce. By June, the stock had spiralled to its lowest point in three years at $178.97 per share.
Since then, several factors have contributed to Tesla’s success: better-than-expected quarter earnings; Tesla’s new Shanghai Gigafactory, the company’s first outside the US, being built ahead of the schedule and even Tesla’s plans for Europe. In November, Musk announced plans for the company’s fourth gigafactory in Berlin. Tesla sales have increased in European countries throughout the first three quarters of 2019, despite a slowdown in the overall market for new cars in the region. Musk also told shareholders on the company’s third-quarter earnings call that Tesla is ahead of schedule on its long-awaited Model Y crossover, which it now expects to launch by next summer. And the company has of course since debuted the controversial but memorable Tesla Cybertruck.
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