Elon Musk, CEO of electric vehicle maker Tesla (NASDAQ:TSLA), took the stand during the second day of the Tesla privatization tweets trial. He made it clear: the so-called “420 price tweet” was no joke. Investors seem pretty happy about his performance thus far, as Tesla closed substantially higher on Monday.
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Musk made it clear right from the go: the Saudi Arabian wealth fund that was interested in backing Tesla into going private at $420 per share was, indeed, serious. The fund “unequivocally,” in Musk’s words, wanted to go private. The 420 connection to marijuana culture was never intended as a joke, but rather that there was “some karma” around the number, Musk noted. Thus, when Musk tweeted “funding secured,” he believed that was the case.
Musk even went so far as to sign a nondisclosure agreement with the fund. However, the funding ultimately fell through, leaving both Musk and investors in a bad position. Ultimately, Tesla and CEO Musk agreed to a $40 million settlement back in 2018. Musk went on to note that he had other sources of funding on hand should the Saudis back out. Musk compared it to his recent sale of Tesla stock to finance the purchase of Twitter. Except, this time, he noted that the shares in SpaceX he held “…would have meant that funding was secured.”
Wall Street seems largely unfazed by the trial. Currently, analyst consensus calls Tesla stock a Moderate Buy. Its average price target of $187.32 per share gives it 31.61% upside potential.
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