Elon Musk Considering Taking Tesla Private, Has Already Secured Funding

Elon Musk

About an hour and 20 minutes after Musk's initial tweet, Tesla actually did halt trading of its shares, pending the release of news from the company.

Elon Musk has "surprised" the market by laying out a tentative plan to privatise the now publicly listed Tesla electric car/solar energy company with a $420 per share price offer.

"Am considering taking Tesla private at $420".

Former SEC chairman Harvey Pitt spoke up about the matter to CNBC, noting that Musk's tweet "might constitute fraud if any of the facts he disclosed are not true" or if there's any indication that his tweet was sent for the objective of boosting Tesla's stock price by soliciting investor hope. It has lost money on an operating basis every year since it went public and it's been burning through billions of dollars as it's ironed out production issues with its Model 3 sedan. The stock rallied 11% on the day, burning short sellers, who Musk has publicly blasted, to the tune of $1.32 billion per S3 Partners and sending many investors scrambling.

Tesla posted a new blog to its site, essentially a copy-and-paste of an email Musk sent to Tesla's employees regarding taking the company private again.

While Twitter users had questioned whether the $420 price was real - the number is a slang term for marijuana - he confirmed that it was about a 20 percent premium over Tesla's share price after its second-quarter earnings.

Despite its challenges, Tesla has remained a favourite among many investors, partly due to their faith in Mr Musk, who made his initial fortune as a co- founder of PayPal and also is the chief executive of a trail-blazing aerospace company, SpaceX, that's already private.

"I believe Tesla considers Tweets as public disclosure".

"Being public means that there are large numbers of people who have the incentive to attack the company", he wrote.

That could lead to a short squeeze - where bearish traders are forced to buy shares to avoid big losses, pushing the stock higher - Dusaniwsky said. It also closely follows an announcement that Saudi Arabia's sovereign wealth fund has taken a 3 to 5 percent stake worth $2 billion in the company.

Elon is right - going private would certainly reduce distractions surrounding the company's day-to-day activities, even if some of those concerns are valid. He said is considering taking the company private at $420 a share and already has secured funding.

It was not clear if Musk was serious as he has a history of erratic tweets, and the company did not immediately respond to request for comment.

Elon now owns about 20 percent of Tesla and so he would need something like $50 billion in additional capital to fully privatize the company, along with a shareholder vote of "yes" to the move.

In another tweet later in the day, Musk assured his vast network of followers that Tesla would remain loyal to those that had supported the company on the journey to where it was today.

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