Published: Wed, August 08, 2018
Money | By Michele Stevens

Elon Musk Tweets About Taking Tesla Private; Jolts Wall Street

Elon Musk Tweets About Taking Tesla Private; Jolts Wall Street

"Funding secured", Musk tweeted, following up with "good morning" and a smiley emoji.

No matter if he was joking or not, as soon as Musk tweeted about this, the stock spiked.

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.

("Yes", Musk replied.) He expressed hope that current investors would stay with the company, later adding that shareholders could either "sell at [$420] or hold shares & go private".

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.

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

Shares were pummeled in May after Musk abruptly cut off questions from Wall Street analysts over Tesla's spending plans.

Tesla has been publicly traded since 2010, and has seen its share price rise from just under $20 then to $360 at time of writing.

Whether Musk's tweet was ethically proper or not, all of the experts interviewed by FOX Business agree the move was unprofessional at best.

In contrast, private companies have a smaller number of shareholders-generally fewer than 2,000-and are not available for purchase on public markets.

Tesla didn't immediately respond to a request for comment.

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The company's stock had been up slightly earlier in the day after the Financial Times reported that Saudi Arabia had quietly built a large stake in Tesla.

Tesla chief executive Elon Musk is gearing up to lead a buyout of the electric vehicle maker in a stunning move that would end the maverick company's eight-year history trading on the stock market.

The billionaire co-founder of the company took to Twitter on Tuesday afternoon to say he was "considering taking Tesla private at $420". He added that "being public means that there are large numbers of people who have the incentive to attack the company".

Musk's approach to a possible go-private transaction also went against the grain of many companies that release major news in non-trading hours.

"I fundamentally believe that we are at our best when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we're all trying to achieve", he said. Public companies often have thousands of shareholders-ranging from huge pension plans and mutual funds to ordinary retail investors.

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It appears that Musk is hopeful that shareholders will simply hang in for the ride and willingly go private. With approximately 170 million outstanding shares, Musk's proposed privatization of the company at $420 per share would require $71.4 billion, about a 17 percent increase.

Taking Tesla private would be an extreme albeit effective way of muting Tesla's bears, according to Michael O'Rourke, chief market strategist at JonesTrading.

Mr Musk has long raged against short sellers and mentioned his desire to be rid of them as one of his reasons for taking Tesla private.

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