7 August 2018: Musk tweets 'funding secured' at $420
Elon Musk tweeted that he was considering taking Tesla private at $420 a share and that funding was secured. The stock jumped and trading was briefly halted. The funding turned out to be far less settled than the tweet implied. The SEC charged Musk with securities fraud, and in a settlement he and Tesla each paid $20 million and he gave up his role as chairman. The going-private plan was dropped.
The lesson: A CEO's tweet is not a contract; wait for real details before acting on bold announcements.
What it meant for investors
$1,000 in Tesla at the start of 2018 → $16,667 today, vs $2,519 in the S&P 500.
We start the clock at the start of 2018, the year it happened. That is 16.7 times the money, and $14,148 more than a plain index fund made over the same years.
What Tesla teaches: The biggest winners often look absurdly overvalued at every stage; holding them requires tolerating repeated drawdowns that would shake out most investors.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2015 | $14.00 | $25,000 | $3,301 |
| 2018 | $21.00 | $16,667 | $2,519 |
| 2020 | $28.00 | $12,500 | $2,092 |
green = beat the S&P 500 · red = lost money
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