Elon Musk indicates taking Tesla private as he posts 'funding secured' tweet
- Author: Wendy Palmer Aug 08, 2018,
Aug 08, 2018, 0:39
The BBC has been unable to verify the post was written by Mr Musk himself, but it has pushed the shares 6% higher.
The unusual step taken early Tuesday afternoon came shortly after Musk dropped a bombshell on his Twitter account by announcing he had lined up the financing to buy all of Tesla's stock at $420 per share.
Tesla's stock spiked Tuesday after Musk made the abrupt announcement in a terse tweet. He apologized for the comments last week in Tesla's latest conference call, saying "there's no excuse for bad manners". However, there was growth in the company's numbers and Musk said it finished its last unprofitable quarter, which caused the stock to rise significantly in the following days. It's the latter Musk seems to want to mute by going private, as he lamented the pressure that putting out quarterly reports (which are mandated by law for public companies) puts on the company to make decisions that will look better in the short term but not serve Tesla best in the long run.
Tesla CEO Elon Musk says he is considering taking the electric vehicle maker private.
The stock since settled at $366.94 before exchanges halted trading, pending an upcoming announcement from the company.
Tesla's shares were at $362.74 prior to the share halt being lifted.
"Either [shareholders] can stay investors in a private Tesla or they can be bought out at $420 per share, which is a 20% premium over the stock price following our Q2 earnings call (which had already increased by 16%)".
He also said that he would hold on to his almost 20% stake in the company if it were taken private, and that he wouldn't expect himself or any other investor to have a controlling vote after the buyout.
Tesla CEO Elon Musk's discussion of privatizing the company's shares sparked a seesaw in prices before trading was suspended.
The company's shares were up more than 5 percent at more than $360.
"I believe Tesla considers Tweets as public disclosure".
In an interview with Bloomberg News in January 2015, he spoke of the benefits of running his closely held rocket company Space Exploration Technologies Corp. and his frustrations with having taken Tesla public in June 2010. He also stated that this is not an attempt to assume more control over his company - Musk owns approximately 20 percent of Tesla right now, and he doesn't see that changing after the company goes private. I think he's serious.
With shares at $369.90, short-sellers logged an on-paper loss of $977 million, according to financial analytics firm S3 partners.
But in a blog post by Musk on the Tesla website, he said: "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".