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Troy Balderson Claims Ohio's Victory; Trump and Kim Summit Phase Two; Trump Warns Companies Over Sanctions in Iran. Aired 3-4a ET

Aired August 8, 2018 - 03:00   ET



ROSEMARY CHURCH, CNN HOST: Hello to our viewers joining us from here in the United States and of course all around the world. I'm Rosemary Church.

We're following breaking news from Ohio this hour as a special congressional election remains too close to call. Many saw this race as a litmus test for the U.S. president.

Right now, Trump endorsed Republican Troy Balderson leads with a razor thin margin. But Democrat, Danny O'Connor has not conceded yet because more than 8,000 absentee and provisional ballots still need to be counted.

Well, still the president is claiming credit for the victory via Twitter saying this, "When I decided to go to Ohio for Troy Balderson, he was down in early voting, 64 to 36. That was not good. After my speech on Saturday, nice, there was a big turn for the better. Now troy wins a great victory during a very tough time of the year for voting."

Balderson is also claiming victory despite the real possibility of a recount here.

CNN's Jason Carroll is at Balderson headquarters.

JASON CARROLL, CNN CORRESPONDENT: By late night the race was still too close to call but Troy Balderson has come out and declared victory. This was a race that really went down to the wire. And in the final days leading up to the special election, Balderson's opponent, Danny O'Connor really seemed to be gaining ground and closing in on Balderson.

This in a district that has been reliably red for three decades but in the end Balderson's team said he was able to hold off in some places like the suburbs and hold his own and do well enough to eke out a win and he's paid special thanks to President Trump.




BALDERSON: America is on the right path and we're going to keep it going that way.


CARROLL: Again this was a race that was too close for comfort for many Republicans and it's a race that's soon to be repeated. Both candidates will face each other again come November.

CHURCH: Jason Carroll reporting there.

Well, Democrat Danny O'Connor was upbeat when he spoke to his supporters late Tuesday. And he took a swipe at President Trump.


DANNY O'CONNOR (D), CONGRESSIONAL CANDIDATE, OHIO: He made our case for change. We're going to make that case tomorrow. We're not stopping now. Tomorrow we rest and then we keep fighting through to November.


CHURCH: And CNN political reporter Rebecca Berg has more from O'Connor headquarters.

REBECCA BERG, CNN POLITICAL REPORER: Well, Republicans are declaring victory in the Ohio special election. Although CNN still believe this race is too close to call. And Democrat Danny O'Connor not conceding. He says this is the tide ballgame plans to continue this race, whether that means a recount or just continuing on until November.

Either way Democrats believe they have something to share with this result is closed margin in a Republican district. DCCC chairman man Ben Ray Lujan said this district should have been a slam dunk for the GOP and the fact that we are still counting valid is an ominous sign for their prospects in November.

Indeed, this is a very Republican district. The 12 districts in Ohio represented formerly by Pat Tiberi, before that John Kasich, a Republican has represented this district in Congress for every year since 1940 except for two years when a Democrat was in office.

That streak maybe not coming to an end just yet but Democrats believe this outcome send a message for the November election that Democratic energy is as strong as ever, especially in the suburbs the exurbs just like in this district.

There are tons of other districts, dozens of other districts across the country where they believe the model here could be replicated and potentially when Democrats the House. Back to you.

CHURCH: Thanks so much. And of course, the Ohio House race comes down to simple math, but it may be a few more days before all the ballots are counted.

CNN's John King explains.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: This Troy Balderson holds on and wins, he will have Delaware County to thank for it. Right here, Franklin County is the big for the Democrats.

Delaware County came in for Troy Balderson tonight. The numbers here too, not just a 54 percent. The numbers there are nearly 5,000 vote margin in Delaware County that was enough to offset the big more since Danny O'Connor had down here.

[03:05:01] Let's come back to the district will keep it at the county levels. So you can see the breakdown. All of the votes we'll making a few votes from precincts tonight but all of the votes we expect to be counted.

So here is the issue. Troy Balderson will go to bed tonight in the lead, 50.2 percent to 49.3 percent. This is what is astounding. We have absentee ballots still to be counted. Astounding absentee ballots doesn't mean they all come in. But the secretary of state says there are more than 5,000, 5,048 to be exact outstanding absentee ballots.

There are also more than 3400. Thirty four, 35 is the number of provisional ballots. These are somebody who shows up at the precinct. The local precinct workers not sure they belong there, they're not on the right place they cast a provisional ballot. The legality of that, the appropriateness of that it's checked in the days ahead.

So you have here 8,400 plus change their votes, 8,500 votes roughly still to be counted or sorted out, it doesn't mean it will be this number in the end, but the secretary of state says 5,048 outstanding absentee ballots, 3,435 outstanding provisional ballots.

The question is, does it change this? In most elections to be honest with you, it does not. In most elections, even when you go through this tend to stand but this was pretty close, 1,766 votes.

The Republicans will be breathing a sigh of relief tonight, but the lawyers the election watchers will be involved.

CHURCH: All right. Our John King with that. Let's bring in political analyst Bill Schneider now joining us live from Los Angeles. Bill, always great to have you on the show.


CHURCH: So of course we are covering key races in five states, but the major contest is the Ohio special election in the 12th congressional district where Republican Troy Balderson fought a very tight race with Democrat Danny O'Connor in a state that should have been safe for Republicans. What might this signal for the November midterm elections do you think?

SCHNEIDER: For Republicans, trouble. These are losing a lot of their affluent suburban supporters who have been there in the Republican Party for decades. A lot of them are very well educated and they don't like Donald Trump. Donald Trump is popular among many Republicans. He has a very loyal base as basically taken over the Republican Party but at the same time Republicans are bleeding a lot of educated, affluent suburban voters who really don't like Trump. It's changing the profile of the Republican Party quite dramatically and we could see it here in this race in Ohio.

CHURCH: And of course this is still too close to call with absentee ballots and provisional ballots to be counted in this Ohio. But we heard there from John King around 8,500 votes in total. What impact, if any, will those votes likely have on the outcome do you think?

SCHNEIDER: Well, it's going to be very difficult to make up a margin -- a make up the margin that O'Connor is down by the remaining 8,400 in some ballots. The absentee and provisional ballots would have to be pretty overwhelmingly for O'Connor for him to make up that margin.

So I wouldn't say it's impossible but it's going to be difficult for O'Connor to win. But in any case they are going to fight again because their votes on the ballot again in November.

The difference is this. In November if Balderson is the incumbent he'll have an advantage. Incumbents do very well in congressional elections.

CHURCH: Yes. Interesting point there. And of course, Republican candidate Troy Balderson declared victory late Tuesday night reminding supporters that this will be fought again in November.

And this is what President Trump tweeted. "After my speech on Saturday night there was a big turn for the better. Now Troy wins a great victory during a very tough time of the year for voting. He will win big in November."

So Bill, was this a great victory as the president suggest, and can Mr. Trump take all the credit for Balderson's numbers in privy?

SCHNEIDER: Not all the credit, maybe a little but all that's all Balderson really needed. When he endorsed Balderson and we've seen this happen in several races around the country there is a Trump. He has a very loyal base. His base is about a quarter of the country but it's majority of the Republican Party.

And when he endorses a candidate we've seen it again and again we saw today in several states, it drives out the Republican base, the conservative base they're loyal to Trump they come out and they basically act upon his direction. In this case they voted as he suggested for Mr. Balderson.

CHURCH: And would you say the Ohio special election was a referendum on the Trump presidency as some have suggested?

SCHNEIDER: Not entirely. No. Because the Democrats didn't make Trump an issue. He knew that is a Republican district and Trump is very popular in that district, they voted for him by 11 points. So the Democrat did not run on the issue of Donald Trump. He ran on

the issue of Medicare. He ran on this issue of healthcare. He talked about inequality. He talk about a lot of things but not Donald Trump because he knew Trump had a lot of appeal among voters in that district.

[03:09:59] CHURCH: And Bill, I do want to want to bring up some numbers. Let's look at what outside group spends on this Ohio vote. More than $5 million was spent on the Republican candidate, while around one million on the Democrat -- Democratic candidate. What does that tell you?

SCHNEIDER: What happened in that district was that spending was prime -- from a Republican certainly, was primarily by outside groups. The Democrat and Republican. The Democrat actually raise more money for his own campaign than the Republican did.

Democrat had a lot of volunteers had a lot of people who were sending in small amounts of money but there are huge interest groups independent spending committees not controlled by the campaign that spent money on behalf of the Republican candidate.

We're going to see this happen again and again all over the country and it's really nationalizing American politics. Every race, every contest everywhere is going to be a national contest about Donald Trump.

CHURCH: Bill Schneider, always great to get your analysis. Thanks so much for coming on the show.

SCHNEIDER: Sure. My pleasure.

CHURCH: Well there is another nail biter right now in the Republican governor primary in Kansas. Another Trump-backed candidate Kris Kobach is neck and neck with incumbent Jeff Colyer.

Now you may remember Donald Trump pick Kobach to investigate the president's claims of nationwide voter fraud but that commission found no evidence of that. Either Kobach or Colyer will face Democratic State Senator Laura Kelly in November.

And in Missouri Republican State Attorney General Josh Hawley will take on one of the most vulnerable Democrats in the U.S. Senate. Hawley will face two-term incumbent Claire McCaskill in November. McCaskill could be facing an uphill battle in Missouri, a state Donald Trump won by nearly 20 points.

And in Michigan CNN projects former state legislator Gretchen Whitmer will be the Democratic candidate for governor. She beat out progressive Abdul El-Sayed, who was hoping to become the first Muslim governor in the United States.

Whitmer will face the state's Republican Attorney General Bill Schuette in the November general election.

Now also in Michigan, former state Representative Rashida Tlaib is trying to become the first Muslim woman elected to the U.S. Congress. The race is too close to call. But if she prevails, she will run unopposed to replace former Representative John Conyers.

He resigned amid allegations of sexual harassment after serving in Congress for more than 50 years.

An extramarital affair admission of embezzlement and descriptions of tax evasion, the prosecution's star witness takes the stand in Paul Manafort's trial and facing a grueling cross examination.

Plus, will President Trump and the North Korean leader meet for a second summit. Why the U.S. national security advisor now says it is a possibility.

And with new U.S. sanctions in effect President Trump issues a warning to anyone thinking of doing business with Iran.

We're back in just a moment. Don't go anywhere.



[03:20:01] JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: -- reported some of the payments to U.S. tax officials as loans that were in fact income, adding that Manafort was, quote, "trying to decrease his taxable income."

Prosecutors demonstrated that Manafort directed these activities through e-mails. There were hundreds of these case, said in court. Adding, quote, "typical practice was Mr. Manafort would send me a list of wire requests."

Gates admitted that he use information provided by Manafort to create invoices for fake amounts of money for wire transfers, but the money never actually went to the vendors, instead, it went to the banks.

The purpose of this, according to Gates, so that the wire transfers would not be recorded on U.S. business records. Nonetheless, on Monday, the prosecutors solicited testimony from Mr. Gates and from one of Mr. Manafort's accountants that tied Manafort more closely to Russia.

The accountant Cindy LaPorta testified that in 2006, Mr. Manafort received a $10 million loan from Oleg Deripaska, a Russian oligarch close to President Vladimir Putin. Ms. LaPorta said she saw no evidence the loan was ever repaid.

Throughout Paul Manafort's attorney's focus has been on undermining the credibility of Rick Gates, saying why should the jury believe him now considering the fact that he has lied before admitted to lying before the federal prosecutors.

Rick Gates answer is that he's taking responsibility now for those mistakes and there was a moment in the trial the day when he said that is a choice that Paul Manafort has not taken as well. Jim Sciutto, CNN, at the courthouse in Virginia.

CHURCH: President Trump is prepared to meet with Kim Jong-un again at any point, that is according to U.S. national security advisor John Bolton. And he told Fox News that the president is not alone.


JOHN BOLTON, UNITED STATES NATIONAL SECURITY ADVISOR: The Secretary of State Mike Pompeo is prepared to go back to North Korea to meet with Kim Jong-un. We've proposed that in our most recent letter from the president to Kim Jong-un, the president is prepared to meet at any point.

But what we really need is not more rhetoric. What we need is performance from North Korea on denuclearization.


CHURCH: SO let's bring CNN's Will Ripley who joins us now live from Hong Kong. Good to see you, Will. Why are we seeing this push for second summit with Kim Jong-un given very little progress was achieved as a result of the first summit? What are the benefits and what are the drawbacks of doing it?

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Well, the North Koreans blame the United States for the lack of progress since the first summit.

They feel that during his most recent trip to Pyongyang, U.S. Secretary of State Mike Pompeo went in there with this list of unilateral what North Koreans view as demands. Give up the nuclear weapons, full transparency about the number of warheads, nuclear facilities, missile production facilities.

And if the North Koreans say they haven't seen anything in return from the United States in terms of a willingness to lift sanctions gradually, and more importantly, perhaps the security guarantee that a peace treaty ending the Korean War would allow.

You know, they want guarantees that Kim Jong-un is going to stay in power and be safe as the North Korean leader for many years to come if North Korea were to take the steps of denuclearizing. Something that they see happening over a very long period of time.

They feel that the negotiations with President Trump and North Korean leader Kim Jong-un went very well. That the two leaders had a good rapport and that his lower-level administration officials the rapport was simply not good.

The visit was described as a really a disaster by some people who viewed Secretary Pompeo as being snubbed when Kim Jong-un didn't meet with them.

So what a source of mine is saying is that the North Koreans feel their best shot at a deal favorable to them is for a direct face-to- face meeting with President Trump. President now saying or at least his security advisor saying that he is open to doing that.

So, this source saying that earlier this week, Rosemary, that a second summit is a strong possibility between the two leaders.

CHURCH: All right. We'll watch to see if that that does indeed occur. Will Ripley, joining us live from Hong Kong. Many thanks.

Well, President Trump is warning other countries to observe the renewed U.S. sanctions on Iran. All he says they won't be doing business with the United States.

He tweeted Tuesday that these were the most biting sanctions ever, and added that he is asking for world peace, nothing less.

Meanwhile, Iraqi Prime Minister Haider al-Abadi said that Baghdad will not violate the sanctions, but he added Iraq doesn't support international sanctions against any country.

And we will get back to our breaking news after a short break. Will Donald Trump's popularity put to the test in elections across the United States? We'll see how the candidate appearing.

Plus, California is just in the middle of its fire season but the U.S. state already faces wildfires in historic proportion, and there seems to be no end in sight.

We're back in a moment.


CHURCH: Welcome back to CNN Newsroom. I'm Rosemary Church. The race for Ohio's 12th congressional district could be headed for a recount. Donald Trump's candidate Republican Troy Balderson hope -- holds a slim lead over Democrat Danny O'Connor. Mr. Trump won this district by 11 points in the 2016 presidential election.

More than 8,000 absentee and provisional ballots still have to be counted. And although Balderson is claiming victory, O'Connor is not conceding.


[03:29:58] BALDERSON: I'd like to thank President Trump.


BALDERSON: America is on the right path and we're going that way.


BALDERSON: Over the next three months I'm going to do everything I can to keep America great again.




[03:30:00] TROY BALDERSON, (R), OHIO CONGRESSIONAL CANDIDATE: America is on the right path, and we're going to keep it going that way.



Over the next three months, I'm going to do everything I can to keep America great again.

DANNY O'CONNOR, U.S. HOUSE DEMOCRATIC CANDIDATE: As we see division and discourse tearing apart our country, we must remember that each and every one of us are god's children and that all of us need to be treated with dignity and respect and I think we could use a lot more of that spirit in Washington these days.


ROSEMARY CHURCH, CNN NEWSROOM HOST: Scott Lucas is a professor at International politics at the University of Birmingham in England, he joins us now live. Good to have you with us. Let us focus on this major context, the Ohio special election in the 12th congressional district where as we saw Republican Troy Balderson declared victory in a very close race with his Democratic rival Danny O'Connor in what was previously a safe Republican seat. So what might these signal, what does this signal to you might occur in a November midterm election?

SCOTT LUCAS, PROFESSOR INTERNATIONAL POLITICS, UNIVERSITY OF BIRMINGHAM, ENGLAND: This signals is going to be one heck of a show. Probably the most important midterm elections in U.S. history. Look, each side is going to spin last night if, well, and eventually when Balderson's victory is confirmed. Is this is indication for them. The Republicans will say, hey we won. Whereas the Democrats will say even if they can't overhaul that narrow lead, look, there was a 13 percent swing to us from the last congressional election and from Donald Trump's victory in 2016. Now that is part of politics.

I think what's important here for me is that one it shows you that each and every district that is contested in November could potentially be on play. There will be some that will be safe. They're going to see unprecedented number of House in Senate races that are going to be extremely tight and beyond that I think the risk is we try to apply a single model fits all. And it won't.

What happens in Ohio might be different from what happens in a place like Nevada, it might be different from somewhere what happens say in the Deep South where I'm from. And I think you have to take cognizance of so many multiple local issues. Issues, like immigration, gun control, issues like the economy that even that presence of Donald Trump that we get fixated on, I don't think he is necessarily going to be the guiding star for what happens. CHURCH: Right. I do want to look at president Trump's tweets, he put

this out to just a few hours ago. Now let's just read it out, when I decided to go to Ohio for Troy Balderson, he was down in early voting 64 to 36. That was not good after my speech on Saturday night. There was a big turn for the better. Now Troy wins a great victory during a very tough time of the year for voting. He will win big in November. So, Scott the president painting this is a big victory and he's trying to take credit for turning things around for Balderson, is this a win for Mr. Trump.

LUCAS: Look, Donald Trump's the guy who always says if I quote, next to sunshine. The fact the matter is that Donald Trump tweet is incorrupt. Troy Balderson was not far behind on the campaign in Ohio. It was always a tossup race. It may be that Trump's personal appearance in Ohio as well as other top Republican is going there, that might had in affect, but I think far from Trump saying, this shows I can win everything. It actually shows first of all, it is a Republican made up barely hang on, despite seeing this is the contest that they had to win and secondly it actually comes back to the point I just made.

Donald Trump may try claim credit. He is reshaping American politics and he has made the rules different, but he's not the only factor in play here. And indeed, it is quite possible that the workshops says that may galvanized people to come out and vote for opponents of the Republicans in November. So, you know, Donald Trump, let us face it. He intervenes for Roy Moore last year in Alabama and the Republicans got tossed on their backside. We will have to see in November whether he is a positive or negative for the GOP.

CHURCH: Yes, that's what everyone's waiting to see so this still nearly 8500 absentee ballots and provisional ballots to be counted in this Ohio voted, to what impact you would expect those votes to have on the outcome. Do you think it could change things as they stand?

LUCAS: I think it is right that CNN has -- is not calling this, but it is a task for O'Connor. He is got to have about 25 percent margin among those absentee and provisional ballots to be able to over haul the lead. That is a pretty are hard task, but it is not impossible. So, you know, given that Ohio gets up to 10 days to count the outstanding ballots and given that there is a recount provision if the margin is within .5 of 1 percent, you and I could be talking about this for a couple of weeks to come.

[03:35:05] CHURCH: Right, and that I do want to get to your take on the Kansas governor election. That's a very tight race as well Trump endorsing Kris Kobach over the incumbent governor and that make some Republican very nervous. So what is that signals to you?

LUCAS: Well, it should make Republicans nervous. That is first of all and that is because of two things. One is it shows that there is a contest as to whether this is the Republican Party or whether this is Donald Trump's party. We seen this and previous campaigns always sought down in Alabama last year, we see the other contest which Trump has defied the establishment of the GOP. The second and important reason why should make Republican nervous, some of those Trump candidate got baggage, Kris Kobach was the head of the ill-fated election commission that tried to prove voter fraud, because Donald Trump said there were millions of voters who came out illegally for Hillary Clinton.

Well, that commission in fact fall flat on its face. Will people remember that November? Again, it just shows with what Donald Trump is saying, I make the sunshine, it might actually bring in a bit of darkness for the Republicans as well in the few months' time.

CHURCH: So, Lucas, thanks so much for analysis, I appreciated it.

LUCAS: Thank you.

CHURCH: Let us turn to Missouri now. A shocking upset on Tuesday's Democratic primary there, voters chose this man, Wesley Bell, ousting incumbent's employee St. Louis County prosecutor, Robert McCulloch, who is tied to the highly controversial Ferguson police shooting. Now, you may recall, Michael Brown, an African-American team was fatally shot by a white police officer four years ago in Ferguson. The shooting spark riots and a national debate about race relations. McCulloch was widely criticized for failing to charge the officer who killed Brown. Tuesday's primary was viewed by many as of vote on his handling of the case. The bill is effectively assured to become the St. Louis prosecutor as he does not face a Republican challenger in November.

Well, coming up, as California faces wildfires like it has never seen before, some scientists are now warning we faced a climate change emergency. We will take a look at that when we comeback.


CHURCH: Let us get you the latest numbers now on that Ohio house racing as a referendum on Donald from. Right now, Republican Troy Balderson has a very narrow lead over Democrat Danny O'Connor. President Trump campaigned for Balderson over the weekend, but O'Connor is not conceding just yet. More than 8000 absentee and provisional ballots still have to be counted.

Well, California is struggling to contain some of the worst wildfires it has ever seen. President Donald Trump has not acknowledged a growing scientific consensus that climate change is contributing to the ferocity of the fires. Instead, he cite other reasons, but it seems the White House is not quite sure what he's talking about. CNN's Stephanie Elam, has more.


STEPHANIE ELAM, CNN CORRESPONDENT: Tonight, the Mendocino fire charring almost 3000 acres, making it the largest wildfire in state history. So far it has scorched an area larger than all of New York City's five boroughs put together. Another fire erupting Monday in Orange and Riverside counties. The holy fire has already burned over 4000 acres. Across the Golden State, 17 large fires are raging as more than 14,000 firefighters battled the fast-moving flames. Spurred on by dry and windy conditions. President Trump Monday, blame the state and accurately linking

California's long-running water shortage to the intensity and spread of fires in the state treating California wildfires are being magnified and made so much worse by the bad environmental laws, which are not allowing massive amounts of readily available water to be properly utilized. Trump also incorrectly suggesting that California diverts water into the Pacific Ocean. Waiting Governor Jerry Brown must allow the free flow of the vast amounts of water coming from the north and foolishly being diverted into the Pacific Ocean.

The Cal fire, the agency in charge of fighting these fires is rebuking those claims in a statement saying, there is nothing to release. There are no specifics to the tweet. We have plenty of water to fight these fires. The current weather is causing more severe and destructive fires. White House officials have declined to clarify the president's statement before the people devastated and threatened by these wildfires. The concern is less political and far more personal.

UNIDENTIFIED MALE: We are working as best we can with the resources that we have to manage this, but Mother Nature is taking this course and we needed to adapt to it.

ELAM: And just to give you an idea of how devastating this wildfire season has been so far in California in the last three weeks, 550,000 acres have been burned and were nowhere near the end of the season. Stephanie Elon, CNN, Lake County, California.


CHURCH: On the wildfires ravaging California are underscoring the catastrophic effects of climate change. For U.S. Vice president Al Gore is sounding the alarm writing this, deeper droughts and long go hottest summers driven by the climate crisis, making wildfires more common, and increasingly worse.

[03:45:06] So what do you think about the recent heat waves and climate change? Send us your thoughts at, CNN international viewers could join the conversation and have their say live on CNN talk. Our panel will be discussing question that is noon in London and &:00 p.m. in Hong Kong, only here in CNN.

Still to come on CNN Newsroom, Elon Musk shots Wall Street by announcing he wants to make Tesla a private company. Will ask a Market Analyst to weigh in. That is next.


[03:50:00] CHURCH: Welcome back everyone, well it is too close to call in the race for Ohio's 12th congressional district. President Trump campaign for Republican Troy Balderson, who currently has the lead over Democrat Danny O'Connor, but thousands of ballots still have to be counted. This district has been Republican for more than three decades and Donald Trump won it 11 points in 2016.

Let us turn to Tesla now. Elon Musk, who stunned investors by announcing he wants to take the company private. In a tweet. He said he had already lined up funding at $420 a share. He calls the move the best path forward for the electric car company and says it would relieve Tesla of the pressure from Wall Street and short-sellers, following Musk's announcement, Tesla finish the day 11 percent higher.

So, let us bring in, David Madden, a market analyst in London. We will have a look at his perspective on this. Thank you so much for joining us. And so the announcement by Elon Musk, that he wants to take the company private. So the value of Tesla rise, but also raise questions about where the Musk broke any laws with his tweet, did he, was this a smart move?

DAVID MADDEN, MARKET ANALYST: It all depends on the intent behind the tweet. Mr. Musk was genuine and honestly is considering taking the company private or it is actually in to the process of buying close doors. The company applied this no laws. I imagine no laws were had been broken. Excuse me, it's only Mr. Musk deliberately state his -- he was considering taking the company public as a way of driving the share price higher and also squeezing out the short-sellers.

Apparently Tesla is a very heavily shorted stock, about 20 percent -- 27 percent of the free flow of Tesla shares, with the shares available on the market are in the hands of short-sellers. Traders were betting against test and want to see the share price go down. So any rally in the share price of Tesla would then put pressure on those traders who are taking a bet against Tesla share price to short-sellers. So if Mr. Musk laws intentionally saying, he is considering taking the public, the company private. Just as a way of getting back at the short-sellers, now that would be a different story. That is always something that the SEC, the Securities and Exchange Commission, the regulating body over the stock market will take very seriously indeed. But it all comes down to Mr. Musk actual intent.

CHURCH: And interesting. So why do you think Musk is doing this right now. What message do you think he is trying to send?

MADDEN: I think Mr. Musk has been a difficult few months and the most recent earnings call. He apologize to investors and to analyst for the retrieval of the previous earnings call, I think things are exactly go according to plan and that this could be a temporary time by Elon Musk as a way of saying that. I don't have to bother answering questions of market analyst or commentators or journalist, or being under the scrutiny of Wall Street. This could be my way of saying, you know what, forget about it, I am just going to get to secure the funding myself, take a private company, I don't have to divulged any details or information.

It seems to me that Mr. Musk would be threatening to take the private company if things are going better. Not too long ago, he just about which he achieved his production target and even though the company has lost the money in the first two quarters of this year. Mr. Musk thus claim that the company is return profit and in the set of two quarters of this year, so it could be a case of the pressure is getting to Elon Musk. And it's also worth pointing out that this sort of erratic behavior could be argued that you expect us from exceptional innovators or inventors, but you're the CEO of a multibillion dollar company. You do need to react in a more stable manner as the message to send out is a big worry for investors.

CHURCH: Yes. Some of the first time that he sent out the tweets that have raised some concerns. I do want to ask you this though, the shareholders have to approve this. How likely is it that that would occur.

MADDEN: Given that, we are about the share price closed, some of the ratio about $40 below the price that Mr. Musk was calling -- it focus of about 10 percent premium above the price. There is a reason likely heard and that shareholders would approve this. Given that, as I mentioned, it is a very large larger short interest of the investors out there were actually betting against Elon Musk, but alternative -- the flipside of things. Only yesterday we heard from the Saudi Arabian sovereign wealth funds which invested $2 billion to the company. So the purity is appetite for this.

Some of the investors might view Mr. Musk, Mr. Musk irrational behavior as a sign that maybe we should consider his offer, should the offer of $420 is actually should be put on the table.

[03:55:06] CHURCH: We will see what happens next in many thanks, David Madden for your market analysis, I appreciate it.

And thank you for your company this hour, I'm Rosemary Church. Remember to connect with me anytime on Titter. Early start is next. For our viewers here in United States and for more on that special election in Ohio, you can join Hannah Vaughan Jones, who is up next in London.