Turns Out Musk Might Actually Be Serious About Taking Tesla Private

Turns Out Musk Might Actually Be Serious About Taking Tesla Private

Tesla shares jumped after a tweet from Musk's verified Twitter account that mentioned taking the company private at a $420 per share price.

Controversial Tesla chief executive Elon Musk said on Tuesday (Aug 7) he was considering taking the electric carmaker private, sending shares sharply higher in anticipation of a big premium. The rally falling well short of $420 is a sign of market skepticism that Musk's plan is feasible.

Tesla's CEO also laid out what he envisions as the ideal path for going private.

Tesla has had more than its share of ups and downs over the past few months, due to an intense focus on production rates and sales figures for Tesla's mass-market Model 3 electric auto. Taking Tesla's shares out of public markets would make it much more hard for people to engage in short selling of Tesla's stock.

Musk, who has cut a controversial figure on social media and beyond, sent the financial world abuzz again around 1650 GMT, tweeting, "Am considering taking Tesla private at $420. Given his historic frustration with short sellers, analysts and certain parts of the press, it is perhaps also not surprising that he has given consideration to taking the company private", Galliers said.

"I believe Tesla considers Tweets as public disclosure". In a May earnings call, Tesla shares slipped after Musk derided "boring, bonehead" questions from analysts regarding the company's finances.

"This proposal to go private would ultimately be finalized through a vote of our shareholders", Musk explained.

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Musk has frequently expressed dismay at Tesla's treatment as a public company and has clashed with regulators, critics and reporters.

The only problem? Those rumors were seeded, very publicly, by Musk himself, who announced his thoughts on Twitter ― and went so far as to set a prospective buyback price of $420 and promise he had the funding "secured". 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.

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

Short sellers - investors who offer to sell shares in the stock in the future (that they may not own, which is legal) at a price lower than curent price, in hope the stock falls even more - were liable for $884 million in losses Tuesday.

Musk has previously discussed possibly going private as a means to realise long-term growth and accomplish a goal that some Tesla acolytes embrace with near-messianic passion. This would enable you to still share in the growing value of the company that you have all worked so hard to build over time.

Finally, this has nothing to do with accumulating control for myself.

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