Does anyone remember the old (very old) E.F. Hutton commercials—”When E.F. Hutton talks everyone listens.” Well, the updated version of that should be “When Elon Musk tweets, the stock market reacts.” Recently, the Tesla and SpaceX chief sent out a 61 character long tweet and POOF! he was suddenly $1.4 billion richer.
The tweet was about taking Tesla private at $420 a share. But even bigger is the fact that he claims to have secured the funding to do so.
Now most companies would stop trading of their stock before releasing such big news that is of critical importance to their shareholders. Furthermore, this sort of announcement is usually made in a regulatory filing. However, we live in a brave new world where all previous protocol does not seem to matter, and important news is revealed on a social media platform.
Needless to say, Musk’s tweet sent the price of Tesla’s stock through the roof.
Shares were already on the rise upon the news that Saudi Arabia’s investment fund had acquired a $2 billion stake in Tesla. Musk’s tweet added fuel to the fire and put Tesla’s shares within reach of their all time high. At the end of that trading day, Tesla stock was up 11% to $379.57 per share. That bump translates to an additional $1.4 billion for Musk. Musk is Tesla’s largest shareholder with 20% of the company.
If Tesla goes private at $420 a share, Musk won’t get his payday. The value of his shares at that price is $72 billion. That is short of the $100 billion performance goal it must reach for him to exercise his $2.6 billion stock option grant.
Overall in August, Tesla stock is up more than 25% so far. Those who doubt Musk—the short sellers—have lost $3 billion. Meanwhile, Musk is laughing all the way to the bank.
Elon Musk has a net worth of $19 billion.
Source: Celebrity Net Worth