Big news Tuesday was Musk announcing he might take Company private and had the financing lined up.  Not surprisingly, the market price of the stock rose towards his stated tender price of $420 per share.

Equally not surprising, on Wednesday the SEC queried the Company for the basis of these remarks.   Seemingly the Board had been alerted.  Is there basis for Musk saying he had the money?  It is $72 Billion.

This move will occasion substantial scrutiny from another source, as the bump in Tesla stock price puts the Company over the conversion price of almost a Billion dollars of convertible bonds that mature next March, with a conversion price of about $360 per share.  If the stock price stays above that number, the bonds convert without the Company needing to fund the shortfall between market price and strike price in a cash distribution.

Wire services and the WSJ are all over this so stay tuned to your own media sources, but if Musk jumped the gun on whether funds are secured there is going to be heck to pay….

Leave a Reply

Your email address will not be published. Required fields are marked *