Elon Musk considering taking Tesla private, TSLA stock trading halted


In a very characteristic move, Tesla CEO Elon Musk tweeted that he was considering taking Tesla private at a value of $420 a share. "Our guess is there is a 1 in 3 chance he can actually pull this off", wrote Gene Munster of Loup Ventures, adding that Mr. Musk's proposed premium over Tesla's existing share price might not be enough to persuade shareholders to sell.

Musk said he wants to take the $64 billion company private because of the "large numbers of people who have the incentive to attack the company".

If Tesla went private, investors could keep their stakes in Tesla through a special fund, or sell their shares at $420 Dollars.

Gains following the tweet added to upward movement on the stock after the Financial Times reported that a Saudi Arabian sovereign wealth fund had built a stake of between three and five percent in the company.

What Musk will ultimately do with the company remains to be seen.

Musk's target for taking the company private would value it at more than $82 billion, according to Bloomberg.

His asking price of $420 would be 22 percent of Monday's closing share price, and almost 9 percent above the stock's all-time closing high of $385. "He originally brought Tesla public in 2010, given he could no longer personally finance its growth, and has continually expressed his frustration with the company being public".

Tesla CEO and founder of the Boring Company Elon Musk spoke at a news conference, June 14, in Chicago.

Musk said the plan being put together would allow shareholders either to remain owners of the private company, or to sell their current positions at $420 per share.

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George Galliers of Evercore ISI said he believed the tweet was serious.

It's not clear how and with whom the company has secured funding, or when the company will begin the formal process of buying up shares and taking itself off the NASDAQ stock exchange.

Often, going private means that a single new shareholder-or a small group of them-buys out most of the other shareholders, leading to a company with a small number of owners.

If that were to occur, it would be the largest deal of its type - moving the electric vehicle maker out of the glare of Wall Street as it goes through a period of rapid growth under tight financial constraints.

In a second tweet on Tuesday, Mr Musk said taking the company private would not lead to a single dominant shareholder.

But asked if he would take legal action against Musk over the allegation, Unsworth said: 'If it's what I think it is yes'.

He has also had a prickly relationship with Wall Street, apologising last week to equity analysts after refusing to answer questions on a May investor call.

In his letter to employees, Musk also pointed to pressure from short sellers as a major downside to being a public company.

For example, one block of 714 Tesla call options, betting on the shares rising above US$365 by the end of the week, were bought for 85 cents, for a total outlay of US$60,690 on Tuesday.