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Tesla Shares Get Late Boost on April Fool’s Press Release


Shares of Tesla Motors Inc. jumped and trading volume surged in the final minutes of trading on Wednesday after the electric car maker issued a press release proclaiming the launch of a new product that turned out to be an April Fool’s Day prank, reported Reuters.

With about five minutes remaining in the trading day, the company posted a statement on its official website under the headline: “Announcing the Tesla Model W.”

In the following minute, the stock jumped about $1.50 or about 0.75 percent from its level the moment before to as high as $188.50.

Nearly 400,000 shares traded in that time, and it was the heaviest one minute of trading volume in the stock since the opening 60 seconds of trading on Feb 12.

Tesla shares quickly retraced most of that upward move and ended the session at $187.59, down 0.63 percent from Tuesday’s close.

The Tesla statement appeared to be a parody of the recent announcement by Apple Inc. that it was launching a computerized wrist watch product later this month called the Watch.

The first paragraph said: “Tesla today announced a whole new product line called the Model W. As many in the media predicted, it’s a watch. That’s what the “W” stands for.”

“This is in no way a competitive response to what some other company is doing,” the release concluded.

Reuters and at least one other news organization published headlines based on the statement.

“We have withdrawn the headlines and regret putting out the material,” a Reuters spokeswoman said.

Tesla said in an email that the statement was an April Fool’s Day prank. The announcement was one of two April Fool’s Day pranks produced by Tesla on Wednesday. The other included a video promoting a new self-driving car that helps owners of its Model S vehicles to evade traffic and parking tickets.

A spokeswoman for the U.S. Securities and Exchange Commission declined to comment.

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CEO Akerson Buys Nearly $1M in GM Stock


General Motors Co. CEO Daniel Akerson has bought nearly $1 million of GM stock as a personal investment, according to a regulatory filing made today.

The 62-year-old Akerson bought 30,000 shares of stock Wednesday at $31.33 a share, for a total transaction price of $939,900, the U.S. Securities and Exchange Commission filing stated.

The purchase brings the CEO’s total stock holdings to 50,000 shares, or $1.6 million based on the current stock price. Akerson, who became CEO Sept. 1, 2010, also holds another 60,584 units of deferred stock awarded as pay, The Detroit News reported.

The chief executive’s yearly compensation package includes $1.7 million in cash, and another $7.3 million in stock-based compensation.

GM was trading about $31.40 a share this afternoon — more than $2 below its initial offering price of $33 a share.

GM spokesman Jim Cain confirmed Akerson bought the stock as a personal investment, but declined to elaborate other than to say the “investment speaks for itself.”

In the last few months, GM stock has struggled to top its initial offering price from last November, and has instead hovered closer to $31 and $32 a share.

GM reported $3.2 billion in profits for the first quarter, a gain fueled largely by one-time items, such as money generated on GM’s sale of former parts supplier Delphi Automotive, LLC.

Analysts were largely disappointed in the automaker’s North American performance January through March, during which the company spent heavily on marketing and sales incentives. Still, many on Wall Street consider GM stock a good buy with industry sales on the upswing and GM models selling well.

The U.S. Treasury, too, is closely watching GM’s share price.

It still holds a 26 percent stake in GM — about 500 million shares — which it hopes to sell off to recoup the $49.5 billion spent on the automaker’s 2009 bailout.

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GM’s Stock Offer: Goldman Sachs Undercuts Rivals as it Loses Top Role


NEW YORK – Wall Street banks led by JPMorgan Chase & Co. and Morgan Stanley stand to make a combined $120 million on General Motors Co.’s initial public offering. If it weren’t for Goldman Sachs Group Inc., they could have made four times as much, Bloomberg reported.

In a pitch to the U.S. Treasury in May, Goldman Sachs offered to accept a fee of 0.75 percent, according to people with direct knowledge of the matter. That’s a fraction of the 3 percent banks typically charge on the largest IPOs and well below the 2 percent offered by Bank of America Corp. and other banks that presented to Treasury, said the people, speaking anonymously because the matter is private.

Goldman Sachs, which had just been sued for fraud by federal regulators and has ties to GM competitor Ford Motor Co., didn’t get a top role in the IPO. The government imposed the fee pitched by Goldman Sachs President Gary Cohn and his five-person team on all underwriters, angering the banks, the people said.

“The fact the other banks are furious at Goldman is not surprising,” said Samuel Hayes, a professor emeritus of investment banking at Harvard Business School in Boston. “They feel it gave the government a real lever to force down fees on the underwriters. But the deal still has a lot of marquee value.”

Banks involved in the deal include lead managers JPMorgan and Morgan Stanley, as well as Bank of America and Citigroup Inc., among others. Some banks made different concessions in their pitches to the Treasury. Charlotte, N.C.-based Bank of America and Zurich-based Credit Suisse Group AG offered to use some of their fees to buy GM vehicles or to subsidize employee purchases of GM cars and trucks, according to the people with knowledge of the matter.

Goldman Sachs spokeswoman Andrea Rachman and spokespeople for the other banks declined to comment. Treasury spokesman Mark Paustenbach also declined to comment.

Goldman Sachs will have a role in the offering, as will Credit Suisse, said the people. Five U.S. banks pitched GM and the Treasury on May 19 in Washington, and non-U.S. lenders made presentations in early June. All sent top executives, such as JPMorgan CEO Jamie Dimon and John Mack, chairman of Morgan Stanley.

Treasury officials including Ronald Bloom, chief of the auto task force, and GM executives were concerned that if it became public the government hadn’t picked Goldman Sachs’s low bid, they would face criticism for wasting taxpayer money because of a bias against the firm, the people said. The officials and executives decided, in conjunction with Lazard Ltd., which is advising Treasury, to use the Goldman Sachs bid and impose it on other banks.

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