Elon Musk Thinking About Taking Tesla Private at $420 a Share

Elon Musk

Musk, the CEO and largest shareholder of the electric vehicle maker, said on Twitter on Tuesday that he has secured private funding.

Upon the news, Tesla stock quickly shot up to $365, climbing toward $420 - the amount Musk noted would be the trigger price. The company had a market value of $58 billion as of Monday's close.

Tesla shareholders would need to vote in favor of going private before the decision is finalized, Musk concluded.

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.

The stock closed at $379.57 after trading was halted for an hour and a half on Tuesday afternoon due to volatile activity caused by Musk's tweets and a report that a Saudi Arabian sovereign wealth fund had accumulated $2 billion in shares.

Second, my intention is for all Tesla employees to remain shareholders of the company, just as is the case at SpaceX.

Shares soared on the news, were then halted for trading by the Nasdaq at 2:08 pm ET and resumed trading at 3:45 pm ET, in tandem with a company blog on the news.

U.S. securities law draws a distinction between private and public companies.

Following the company's surge after last week's earnings, Musk took aim again at a short-seller in a reported short YouTube video that likened these investors to Hitler's last days.

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.

Tesla has been public since it filed an IPO in 2010.

Tesla did not return repeated calls for comment from CNBC, nor did the Securities and Exchange Commission, as of this publishing. He says the move could be structured so that so that all shareholders will have a choice to remain investors in the private company or sell their stock for $420 (£324.58 / €362.11) per share. It burned through less cash ー $739.5 million in Q2 compared to $1 billion the quarter before ー and managed to increase production significantly of the mid-range Model 3 sedan.

Mr Musk has previously discussed the drawbacks of being a public company, saying shareholder demands often produce short-term thinking. "Funding secured, ' Musk tweeted, following up with 'good morning" and a smiley emoji.

As the matter unfolds, some are questioning whether or not the tweets are authentic.

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

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