UPDATE: Tesla's First Acquisition Riviera Tool Is Trading Up 10,000%
Tesla Motors Inc (NASDAQ: TSLA) will be acquiring a Grand Rapids, Michigan-based auto parts maker, the Detroit Free Press reported on Wednesday night. Traders seems to have discovered this little-known company late Thursday morning.
Riviera Tool Company (OTC: RIVT), a penny stock, was up more than 10,000 percent (or roughly $0.49) at $0.51 around 1:00 p.m. ET. The little-traded over-the-counter stock saw a flurry of buying action around 11:10 a.m. ET. The activity died died down about an hour later before picking back up again.
The stock's 30-day average trading volume was a little more than 10,000 shares. Its traded nearly 6 million shares so far in Thursday's session.
The Free Press said Riviera Tool "makes stamping parts that are shipped to Tesla's assembly plant in Fremont, Calif., [and] has about 100 employees. Tesla is expected to retain those workers and eventually rename the operation Tesla Tool & Die, said the source who is not authorized to speak publicly about the transaction."
This is Tesla's first acquisition since being founded in 2003.
UPDATE: Reports surfaced Wednesday afternoon that Tesla is actually buying Riviera Tool, LLC, which is a separate entity from Riviera Tool Company. Riviera was delisted in 2007, but found some life on the OTC market. SEC filings to further explain the delisting can be found here and here.
This confusion led to more than 16 million shares of Riviera Tool Company being traded on the OTC market on Wednesday. FINRA halted trading on the stock shortly after 5 p.m. ET Wednesday.
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