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Abu Dhabi, UAEWednesday 26 September 2018

Tesla shares cap worst week since February 2016 down 14% 

The car-maker's have dipped for the fourth straight day on Friday

Tesla shares capped the worst week since February 2016 amid fresh fears about the future of the electric car-maker. (Photo by SAUL LOEB / AFP)
Tesla shares capped the worst week since February 2016 amid fresh fears about the future of the electric car-maker. (Photo by SAUL LOEB / AFP)

Tesla shares plunged Friday, capping its worst week since 2016, after Elon Musk told the New York Times that no one saw or reviewed his tweet about the plan to take the company private before he posted it.

Musk, Tesla’s chief executive and chairman, told the newspaper that he typed the take-private tweet as he drove himself to the airport on August 7. The tweet said: “Am considering taking Tesla private at $420. Funding secured.” The billionaire frequently teared up in an interview and discussed the personal strain of leading the electric-car maker, the newspaper said.

The stock was nowhere near that price on Friday as it tumbled 8.9 per cent, the most in two years, to close at $305.50. The fourth straight day of declines has wiped out Tesla’s year-to-date gains and pushed the shares down 14 percent this week -- their most dire one since February 2016.

In an hour long interview with the newspaper, Mr Musk also detailed his frequent use of the sleep-aid Ambien -- a drug he’s discussed using before, and whose well-known side effects include sleepwalking. “It is often a choice of no sleep or Ambien,” he told the newspaper.

Rather than put him to sleep, the drug has sometimes led Mr Musk to spend his nights on Twitter, worrying some board members, the newspaper said, citing a person familiar with the board’s thinking.

The going-private tweet has set off a firestorm, causing the stock to jump but also prompting mounting scrutiny, including a Securities and Exchange Commission investigation.

Almost a week later, the CEO said the basis for that statement were conversations with Saudi Arabia’s Public Investment Fund, which first expressed interest in helping take the company private in early 2017. Tesla’s board has since clarified that it hasn’t received a formal proposal from Mr Musk, nor has it concluded whether going private would be advisable or feasible. This week, Mr Musk was said to have received a subpoena for more information, according to a person familiar with the matter.

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One funding possibility being considered for the potential privatisation is for Mr Musk’s rocket company SpaceX to help bankroll the deal and take a stake in Tesla, the New York Times said, citing people familiar with the matter.

Efforts are also under way to recruit an executive to take some pressure off Mr Musk, the newspaper said, citing people briefed on the search. A couple of years ago, Tesla approached Facebook executive Sheryl Sandberg about the job, Musk told the newspaper, but added that no active search is taking place currently “to the best of my knowledge.”

“If you have anyone who can do a better job, please let me know,” Mr Musk told the Times. “They can have the job.”

Despite the frenzy over Tesla’s future, production of the pivotal Model 3 sedan -- which has frequently kept Mr Musk at the Fremont factory overnight -- is defying the odds and going well, according to Evercore ISI analysts. Output is well on track for weekly production goals, and set for a significant boost, the analysts wrote Thursday after touring the plant. Bloomberg’s Model 3 Tracker also shows significant improvement this month.

Mr Musk told the newspaper that he didn’t recall communications from the board at all and that he “definitely did not get calls from irate directors.” He later amended the comment through a spokeswoman, saying lead independent director Antonio Gracias had contacted him about the August 7 tweet. Musk agreed not to tweet again on the possible privatisation without discussing it with the board, the spokeswoman said.

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