Tesla closes above $420 for first time since Musk tweet

Shares of electric-car maker Tesla closed above $420 on Tuesday — more than a year after tweeting about that mythical, magical number got CEO Elon Musk in trouble with securities regulators.

Tesla closed at $425.25 a share at 1 p.m. Eastern Time, after breaching the $420 mark in intraday trading on Monday. The new high brings the company’s total stock market value to $76.6 billion.

In a tweet Monday, Musk crowed about the brief intraday breach: “Whoa … the stock is so high lol,” the chief executive wrote, with a wink to “420,” a classic reference to marijuana. 

The symbolism of the $420-a-share figure for Tesla goes back 16 months. In August 2018, Musk tweeted, “Am considering taking Tesla private at $420. Funding secured,” sending the company’s stock soaring. It turned out, though, that he did not have funding secured, and that he chose the $420 figure in a back-of-the-envelope calculation, and also because he “thought his girlfriend ‘would find it funny.'”

The Securities and Exchange Commission sued Musk for stock manipulation, which resulted in his ouster as Tesla’s chairman, an agreement not to tweet unsupervised and a $20 million fine for Tesla. The stock’s wild fluctuations during the SEC’s investigation took billions off the company’s stock market value, although that didn’t do much to discourage Musk from tweeting.

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On Monday, he posted a screenshot of the company’s stock performance, which he titled, “stock art.” 

Tesla has been under pressure from investors to turn a consistent profit, but assuaged some of those concerns this year after it secured a $1.4 billion loan for its China factory, introduced an electric truck and posted a rare quarterly profit last month. The profit report — only the fourth profitable quarter for Tesla over a five-year period — surprised investors and sent Tesla’s stock soaring to nearly $300 per share in November. It also clobbered short sellers, who lost $1.5 billion in a single day. Tesla stock is up 20% since Musk’s infamous tweet.

Musk has said several times that he’d prefer to be running a private company so as to avoid investor scrutiny and pressure from short-sellers. Musk has a roughly 20% stake in Tesla, worth about $13.8 billion this week.

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