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Tesla share trading halted after Musk tweet boost

Trading in Tesla shares was halted on Tuesday, after a tweet by chief executive Elon Musk sent shares soaring by more than 7%.

Shares in Tesla hit $367.25 after a message posted at 9.48am New York time on Mr Musk's verified Twitter account said: "Am considering taking Tesla private at $420. Funding secured."

Nasdaq stock exchange halted trading in Tesla shares around 2.08pm local time.

Mr Musk's statement came at a time when the electric car maker faces financial constraints, and barely a week after the company announced it had made its biggest net loss to date of $717.5m (£547.6m) during the second quarter ending in June.

During the conference call accompanying the results, Mr Musk said he expected the company to avoid going back to the markets for capital and to be "essentially self-funding on a go-forward basis".

At $420 per share, a deal would represent a 22.8% premium to Tesla's closing price on Monday, making it one of the
biggest deals to take a company private, with a price tag of about $72bn.

When asked on Twitter whether he was serious, Musk replied: "Yes….It saves a lot of headaches."

Am considering taking Tesla private at $420. Funding secured.

— Elon Musk (@elonmusk) August 7, 2018

Tesla did not immediately respond to a request for clarification.

But in a blog post by Musk on the Tesla website, he said: "I fundamentally believe that we are at our best when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we're all trying to achieve.

"This is especially true for a company like Tesla that has a long-term, forward-looking mission. SpaceX is a perfect example: it is far more operationally efficient, and that is largely due to the fact that it is privately held."

The company had a market value of $58bn as of Monday's close.

Musk owns nearly 20% of the company.

Earlier in the day, the Financial Times reported that Saudi Arabia's sovereign wealth fund had built an undisclosed stake of between 3% and 5% in Tesla.

Mr Musk has been under intense pressure this year to prove he can deliver on his promise to turn his money-losing company into a profitable higher-volume manufacturer.

Image: Tesla said it met targets to produce 5,000 Model 3 vehicles per week by the end of its second quarter.

Last week Tesla said it had achieved its goal of producing 5,000 Model 3 vehicles per week by the end of its second quarter in June, but burned through $739.5m (£565.2m) in cash during the period in order to do it.

The US Securities and Exchange Commission (SEC) allows companies to use social media outlets like Facebook and Twitter to announce key information in compliance with its "fair disclosure" rules, as long as investors are alerted about which social media outlets will be used to disclose such information.

The Wall Street regulator did not immediately respond to a request for comment on Musk's tweet.

George Galliers, analyst at Evercore ISI said he believed the tweet was serious. He added: "I can't believe this is something to bluff or make fun of.

More from Elon Musk

"Given his historic frustration with short sellers, analysts and certain parts of the press, it is perhaps also not surprising that he has given consideration to taking the company private."

"Details, structure, participants and how the valuation has been determined remain to be seen."

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