NEW YORK – Shares of electric automobile manufacturer Tesla Motors dropped sharply on Thursday on Wall Street two days after company founder Elon Musk made a surprise announcement on Twitter that he was considering taking the company private.
During the trading day on Thursday, shares of Tesla were on the decline practically non-stop, losing 4.83 percent and ending the session at $352.45.
Thursday’s loss in value comes on the heels of a decline on Wednesday of 2.43 percent.
With the two-day price slide, Tesla shares are now below $355.50, the price at which they were trading on Tuesday when Musk began to tweet his plans to take the company private, a move that generated confusion among investors and resulted in a sharp initial spike in the stock price.
Musk is known for his at times erratic and innovative nature and he has been criticized by numerous analysts in recent days as they have questioned whether his Twitter announcement was bona fide or if he made it merely with the aim of juicing the share price, a move that would be illegal.
If Musk’s plan to take Tesla off the public market is real, experts also questioned whether current rules and regulations allow such an announcement to be made to investors via a social network.
In fact, the Wall Street Journal reported Wednesday that the US Securities and Exchange Commission had questioned Tesla officials about Musk’s announcement.
On Thursday, however, the CNBC cable financial news network reported that the Tesla board of directors is scheduled to meet next week to plan the firm’s withdrawal from the public market, a meeting that would serve to confirm the veracity of Musk’s statements.
In addition, the Journal reported that the board might ask Musk to recuse himself from the process so that it can analyze the viability of withdrawing Tesla from public trading.
Musk had tweeted – and then said in an e-mail to Tesla employees – on Tuesday that he was considering taking the firm private at a share price of $420, buying out any shareholders who wanted to sell their shares at a premium, although he added that he hoped people would continue to hold on to their shares.