For Tesla Chief Executive Elon Musk, outside-the-norm has always been the norm. Even by those standards yesterday Mr. Musk sent shock waves throughout the business community with message he sent from his Twitter account announcing he was considering taking the company private at $420 a share. Mr. Musk also indicated that funding had been secured.
The timing of the message, during market trading hours, was highly unusual for a message of this magnitude. Also, there was no explanation for how Mr. Musk arrived at the $420 per share figure. Mr. Musk would need to raise an estimated $60-$70 billion in debt and/or equity to take Tesla private. That is an enormous task for a company that is still rapidly burning through cash. The SEC will certainly take a close look at Mr. Musk's tweets.
Time will tell what the outcome ultimately will be, but there is no question this is one of the wildest financial stories I have seen. Tesla's stock has never traded on fundamentals, and headlines around Mr. Musk have often been surreal.
For more analysis on this story, head over for a take from MarketWatch.
Last week a significant milestone was reached as Apple became the first company to reach a valuation of $1 trillion. From the WSJ:
Apple’s rise has been propelled by the sustained success of the iPhone developed under late co-founder Steve Jobs, a product visionary who helped revive the company from a death spiral in the late 1990s. His successor, Tim Cook, has turned Apple into a cash-generating giant by pushing its existing products to prominence in China and cultivating its rapidly growing services business—moves that have helped stave off concerns about the absence of a new, blockbuster device.
With a market capitalization of $1 trillion, Apple is larger than the GDP of most countries, including Sweden, Saudi Arabia, Turkey and The Netherlands. It is a remarkable achievement, especially when you consider that the company had to reinvent itself multiple times just to stay in business. Their superior innovation, technology and marketing helped them become the first trillion dollar company.