Musk says he may take Tesla private and shares roar

Share

Chief Executive Elon Musk said on Tuesday he is considering taking Tesla Inc private in what would be the largest deal of its type, moving the electric auto maker out of the glare of Wall Street as it goes through a period of rapid growth under tight financial constraints.

The BBC has been unable to verify the post was written by Mr Musk himself, but it has pushed the shares 6% higher.

Musk claimed on his personal Twitter account to have secured funding for the maneuver, estimating the per-share valuation of the possible transition at $420.

Tesla did not immediately respond to a request for confirmation or clarification.

Musk originally brought Tesla public in 2010 to help raise funds for the company's growth.

Musk has a long history of bristling at the amount of scrutiny Tesla endures from investors and media.

Tesla posted a new blog to its site, essentially a copy-and-paste of an email Musk sent to Tesla's employees regarding taking the company private again.

Mr Musk's statement came at a time when the electric vehicle maker faces financial constraints, and barely a week after the company announced it had made its biggest net loss to date of $717.5m (£547.6m) during the second quarter ending in June. Public companies often halt trading in their stock and file official releases before making similar statements so as to minimize market jolts and abide by guidance from the Securities and Exchange Commission.

More news: Trump says his son sought information on Clinton from Russians in 2016
More news: EPL: Steven Gerrard to takeover as Manchester United manager
More news: 9-year-old robbed at lemonade stand in Monroe

Shares were pummeled in May after Musk abruptly cut off questions from Wall Street analysts over Tesla's spending plans.

"If the process ends the way I expect it will, a private Tesla would ultimately be an enormous opportunity for all of us".

Tesla and its investors are no stranger to seeing the company's share price follow a rollercoaster trajectory.

This is especially true for a company like Tesla that has a long-term, forward-looking mission. At $420 a share, Tesla would have an enterprise value of about $82 billion including debt.

"I believe Tesla considers Tweets as public disclosure". I wanted to let you know my rationale for this, and why I think this is the best path forward.

Short interest in Tesla on Monday stood at almost $12 billion USA, equivalent to 28 per cent of its float, according to S3 Partners, a financial analytics firm.

George Galliers, analyst at Evercore ISI said he believed the tweet was serious. 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.

Share