Tesla Inc: Elon Musk says he's considering taking car-maker private

Elon Musk says he's considering taking Tesla private | TheHill

Elon Musk tweets about going private and shares 'skyrocket'

"Funding secured", he said on Twitter.

Musk has followed up with an offer for current stockholders to keep their shares and "go private" - without knowing further details on the company's board and governance structure.

But even for him, this was stunning. The stock had been up earlier in the day after The Financial Times reported a Saudi Arabian sovereign wealth fund had bought a $2 billion stake in Tesla.

What seemed like a joke at first may be serious and as the company's stock price went insane, trading had been halted.

Shares quickly jumped as high as $371.

There's also a question of the funding Musk claims he has "secured".

Palo Alto-based Tesla, named after the physicist Nikola Tesla, went public in 2010.

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Musk said that he expects Tesla to eventually return to being a public company. When shares resumed trading at 3:45 pm, shares had soared more than 10 per cent and closed up 11 per cent on the day.

But Musk seemed to relish the tumult.

While Mr Musk has previously discussed the drawbacks of being a public company, he has also used his Twitter account in ways that surprised investors.

Still, the tech-heavy NASDAQ exchange where Tesla is listed halted trading over the uncertainty of whether Musk's tweet may have violated any Securities and Exchange Commission rules that prevent company executives from making market-moving statements.

He reassured investors that he planned to remain CEO. BMM Bloomberg reports that the PIF is now one of Tesla's top 8 shareholders.

Going private, Musk said, would end "negative propaganda from shorts", referring to his hated short-sellers.

His US$12b Tesla stake would presumably be rolled into the private enterprise.

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Musk, however, did not elaborate on when the Tesla mini-car will hit the roads.

He says no final decision has been made.

Musk laid out his rationale: As a public company, Tesla is subject to "wild swings" in its stock price that serve as "a major distraction". He goes on to mention the quarterly earnings cycle and how that puts pressure on the company to focus on moves that would boost quarterly numbers while disregarding longer-term motives and outcomes.

The number of shares borrowed to sell the stock short stands at 33.8 million shares, according to data compiled by IHS Markit, meaning that Musk's tweet alone sent a $US783 million shock through the bear patch.

The goal, Musk added, was not to tighten his grip on Tesla.

"This has nothing to do with accumulating control for myself", Musk said in the Tuesday email. He said his own stake of about 20 percent would not be "substantially different" if the plan were to proceed. By contrast, Musk made the initial comment on Twitter and then embellished on the remarks in a series of responses to users on the platform. Public companies often have thousands of shareholders-ranging from huge pension plans and mutual funds to ordinary retail investors. Shares lifted almost 11% to finish at just below $380 per share in response, following a similar surge after the Q2 earnings report. What do his latest tweets mean for the future of Tesla?

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