Musk explains why he thinks taking Tesla private is 'best path forward'

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

Tesla CEO Elon Musk said Tuesday he was considering taking the company private at a price of $420 a share, posting his intentions on Twitter and causing the stock price to jump 7 percent before trading was temporarily halted around 2 p.m. The company had a market value of $58bn as of Monday's close. Why would Musk want to take his company private?

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.

His missive came minutes after the Financial Times reported that Saudi Arabia's Public Investment Fund had built an undisclosed stake of 3 per cent to 5 per cent this year, citing people with direct knowledge of the matter it didn't identify.

If Musk decides against going private, Gordon said his credibility could take another hit, though one he could weather.

While Twitter users had questioned whether the $420 price was real - the number is a slang term for marijuana - he confirmed that it was about a 20 percent premium over Tesla's share price after its second-quarter earnings.

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.

"The reason for doing this is all about creating the environment for Tesla to operate best", Musk, 47, wrote in an email to employees. He said is considering taking the company private at $420 a share and already has secured funding.

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The move comes as Mr. Musk has been under mounting pressure from investors and analysts to stem Tesla's financial losses after repeatedly missing production targets for the Model 3, its mass-market sedan, even as it faces increased competition from major automakers, several of whom are planning electric vehicle offerings.

Scottish money manager Baillie Gifford, which recently urged Musk to focus less on tweeting and more on running the business, is the fourth-largest shareholder, with a almost 8% stake.

Musk and his luxury automaker have been under huge pressure to overcome repeated delays and deliver on promises of producing 5,000 of Tesla's more affordable Model 3 cars per week.

Elon formally lays out his idea of going private.

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. If Musk can't prove the allegedly secured funding at $420 per share, he may be accused of market manipulation or market fraud. I think he's serious.

"Details, structure, participants and how the valuation has been determined remain to be seen".

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.

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