Tesla’s stock tumbled Thursday evening after the SEC sued Elon Musk for misleading investors.
Musk tweeted on August 7 in which he had secured funding to take Tesla private at $420 a share. Typically, stocks match takeover prices in which a company publicizes. Investors assume the deal will be completed in addition to the company will eventually be worth the cost at which the company says in which will be sold.
However, skeptical investors never believed Musk, in addition to the stock never approached anything close to $420 a share. in which rose as high as $387.46 on August 7 in addition to tumbled since then.
Their skepticism was for not bad reason: Musk had never secured the funding, the SEC alleges. He abandoned the plan to go private three weeks after he first tweeted about in which.
The stock fell as low as $270 after the bell Thursday, 12% below Tesla’s closing cost for the day. Including the after-hours plunge, Tesla’s stock has plummeted more than 29% since Musk’s infamous tweet.
Tesla’s ( falling stock cost could come back to haunt the company. Tesla can be burning through cash to build expensive plants in addition to cars, yet in which badly needs in which money to pay about $1 billion in debt by February 2019. Most of in which might convert to stock if Tesla’s cost holds above $360 — yet in which seems unlikely. )
If Tesla needs to pay back its debt with cash — in addition to if the company lacks the cash to pay in which — Tesla could raise the money by issuing more debt or stock. yet in which could further deflate its stock cost, depressing the amount of capital the company has to spend on completely new infrastructure to build cars.
Musk has denied in which the company faces a cash crunch. He says increased product 3 sales will generate enough cash to finally make Tesla profitable within the second half of 2018.
The SEC’s lawsuit could cause various other problems for Tesla.
The agency has asked a federal judge to prevent Musk through serving as an officer or a director of a public company, among various other penalties.
in which’s a serious concern for Tesla, which Musk built through scratch into a multibillion-dollar company. He’s the carmaker’s chairman in addition to CEO.
CNNMoney (completely new York) First published September 27, 2018: 5:52 PM ET