Tesla stock price slides again amid doubts over Elon Musk's plans

Oscar Cross
August 21, 2018

"Yeah, absolutely. A US$25,000 auto is something we could do".

Slashing its price target for Tesla Inc (TSLA.O) from $308 to $195, the brokerage said it did not believe Chief Executive Officer Elon Musk had funds for a plan announced by a tweet that said "funding secured" two weeks ago. When pressed by the media and financial market regulators, the CEO revealed he had been in talks with PIF for a couple of years, and the fund's managers had made it clear to him the final decision was his.

Tesla shares again plummeted on reports that Musk's tweets regarding taking Tesla private were not signed off by anyone.

Tesla CEO Elon Musk's Twitter comments early last week about turning Tesla back into a private company via a substantial stock buyback included indications of possible backing from a Saudi Arabian wealth fund that had been trying to build up a sizable stake in the automaker via stock purchases. The stock has trended downward after Musk's August 7 tweet suggesting he would push to take Tesla private. After telling the New York Times that his job was taking a serious emotional toll on him, he spoke to YouTube personality Marques Brownlee, suggesting that it would take "maybe" three years to produce a $25,000 auto.


A person with direct knowledge of the matter told Reuters last week that the SEC has opened an inquiry related to Musk's tweets on the buyout and the billionaire is also facing a class action suite from investors who lost money in the share moves.

PIF's interest in Lucid Motors exemplifies Saudi Arabia's goal of diversifying its investment portfolio from oil sources.

Remember Lucid Motors? It's that electric vehicle startup that began life as Atieva back in 2007.

While its prototype Lucid Air sedan has been well-received, it's unclear whether the company has the funding to get production going. Vertical Research Group's Gordon Johnson, a long-time critic of the company, said the probability of Tesla being taken private was less than 10 per cent, and called the process a "waste of time". It is not clear when this vehicle will become available, though the company is accepting refundable deposits of $2,500 from consumers on its website.

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