Elon Musk considering taking Tesla private, TSLA stock trading halted

Elon Musk at a Tesla

Elon Musk at a Tesla

Tesla did not immediately confirm if Musk himself sent the tweet or if it was the result of a hack.

In his tweets, Musk said he would keep his Tesla shares no matter what happens, and noted that he now doesn't hold a controlling interest in the company.

Mr Musk has previously discussed the drawbacks of being a public company, saying shareholder demands often produce short-term thinking.

"The reason for doing this is all about creating the environment for Tesla to operate best", Musk wrote.

Musk has lashed out at critics and investors who have shorted the stock, going so far as to call one prominent critic's employer to silence him, and refusing to take a hard question from a financial analyst in the company's June shareholder meeting.

Musk said he wouldn't sell his stake if the company went private. He added that "being public means that there are large numbers of people who have the incentive to attack the company".

He implied that the funding values the company at $420 a share.

At that price, the buyout would cost almost $72 billion, based on Tesla's outstanding stock as of July 27, but it's unlikely the deal would cost that much because Musk owns a roughly 20 percent stake in the Palo Alto, California, company. SpaceX is a ideal example: it is far more operationally efficient, and that is largely due to the fact that it is privately held.

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$420 per share would be a significant premium on where Tesla is now trading, and also its performance over the first half of the year. Musk, 47, has already pledged some of his shares of Tesla's common stock to secure bank borrowings, according to a June 2018 filing. He also suggested the move could only be temporary as he stated "once Tesla enters a phase of slower, more predictable growth, it will likely make sense to return to the public markets".

The company's stock price jumped from US$342.54 ($460.76) prior to the announcement to US$379.57 ($510.60) at the day's close, a rise of nearly 11 per cent, but still significantly short of the proposed buy back price. It's worth noting here, too, that it was just last week that Tesla reported losses, before reassuring investors that the company's "goal is to be profitable and cash-flow positive for every quarter going forward".

His plan, outlined in the email to employees, would give shareholders a choice to sell their shares or maintain a stake in the private company.

"My hope is all current investors remain with Tesla even if we're private", Musk tweeted. They would continue to have separate ownership and governance structures.

Musk also denied giving donations to a political action committee dedicated to helping the Republicans maintain control of the house.

But time and again Musk and Tesla have been given more time to achieve success.

Mr. Musk did not detail where the money for a buyout would come from, tweeting that investor support was only "contingent on a shareholder vote". He responded to one user who observed that going private would save Tesla "a lot of headaches".

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