Here's why Elon Musk wants Tesla to go private

"Funding secured", the eccentric CEO tweeted earlier Tuesday afternoon, sending shares up $16 in five minutes, to $371.07.

Musk tweeted that he hoped all current investors would remain were the company to go private.

Tesla's shares were up 6.5 percent at $363.46. A price of US$420 a share would value the company at US$72b, nearly double Ford. "They would continue to have separate ownership and governance structures", Musk wrote. If Tesla went private, current investors could keep their stakes in Tesla through a special fund, or sell their shares at $420, he said.

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 per cent stake in the Palo Alto, California, company. Musk previously tweeted an April Fool's joke about his $60 billion company going broke. They are also shielded from the ups and downs of the stock market.

It's unclear what prompted the tweet.

The SEC did not immediately respond to a request for comment on Musk's tweet.

Basically, I'm trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible. If the process ends the way I expect it will, a private Tesla would ultimately be an enormous opportunity for all of us. "Would create special-purpose fund enabling anyone to stay with Tesla".


"Elon Musk does not want to run public companies", Munster said.

The electric vehicle maker reported revenue of $4 billion in the second quarter of 2018, with $2.2 billion in cash in hand.

Despite the unconventional method of disclosing such information, analysts took Musk at his word. Before Musk's tweet, Tesla had a market value of $58 billion, already higher than that of General Motors or Ford, even though those companies are significantly larger and more profitable.

It is far from the first time Musk has dropped a financial bomb to his 22 million Twitter followers.

"His mission for Tesla (to accelerate the globe's adoption of sustainable energy) is both grand and long-term, making it hard to accommodate investors quarterly expectations", he wrote.

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

Going private would reduce the market pressure on Tesla, especially from short sellers who believe Tesla is set up to fail and are pursuing strategies to profit from Tesla's troubles.


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