Tesla soars to a record high, closing in on Elon Musk's $420-per-share goal
- Tesla surged as much as 3.4% Wednesday to an intraday record high, closing in on CEO Elon Musk's $420-per-share goal.
- The stock traded as high as $395.20 per share, jumping after Bloomberg reported that the automaker is exploring a 20% price cut for its Model 3 sedan in China.
- Tesla is up about 54% since it announced a surprise profit in its third-quarter earnings report.
- Musk famously tweeted he sought to take Tesla private at $420 per share in August 2018.
- The Securities and Exchange Commission later accused Musk of making "false and misleading statements" in the tweet, and Musk quickly settled with the agency for $20 million.
- Watch Tesla trade live here.
Tesla jumped as much as 3.4% Wednesday to an intraday record high and near CEO Elon Musk's $420-per-share goal.
The electric-car manufacturer's stock traded as high as $395.20 per share, surging amid a Bloomberg report stating Tesla is considering lowering the cost of its Model 3 sedan by 20% in China next year.
The company aims to lower the starting price of its entry-level model by sourcing more parts from China and avoiding tariffs, sources familiar with the matter told Bloomberg. The move would help the electric car better compete with domestic competitors in the country.
Tesla stock has soared about 54% since it posted a surprise third-quarter profit on October 23. Musk revealed its new Shanghai factory was already in the trial production phase and would be ready to hit volume production "in a few months." The automaker also moved the release window for its Model Y crossover to summer 2020 from fall 2020. The stock surged as much as 20% in the next trading day alone.
Tesla is betting its Shanghai Gigafactory will open the door to rapid revenue growth in China, where other major automakers like BMW and Mercedes are poised to expand their electric-vehicle footprint.
The record high is also just a 6.4% increase away from Musk's previous target price for taking Tesla private. The CEO famously tweeted on August 7, 2018, that he was "considering taking Tesla private at $420," ending the message with the phrase "funding secured."
Subsequent tweets detailed that Musk wanted to create a "special purpose fund" to allow the public to continue investing in the company. Current shareholders would have the option to sell shares at $42o each or become private shareholders, Musk added.
By August 15, the Securities and Exchange Commission sent subpoenas to Tesla concerning the tweet and Musk's plan to take the company private. The SEC made an inquiry earlier that month into whether Musk's statements were truthful, and by late September, the regulatory agency filed a lawsuit against Musk accusing him of making "false and misleading statements" in the tweet.
The SEC added that the meeting between Musk and the fund participating in the buyout "lacked discussion of even the most fundamental terms of a proposed going-private transaction."
It took only two days for Musk to settle with the SEC, with the CEO and Tesla each paying a $20 million fine without admitting guilt. The company's stock is up about 27% since the settlement's announcement.
Tesla traded at $392.86 per share at 3:20 p.m. Wednesday, up roughly 18% year-to-date.
The automaker has 11 "buy" ratings, 10 "hold" ratings, and 15 "sell" ratings from analysts, with a consensus price target of $291.52, according to Bloomberg data.
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