Elon Musk has said he is considering taking his electric sports auto company Tesla off the stock market and into private ownership. "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. "Funding secured", Mr Musk wrote in his first tweet, following up with "good morning" and a smiley emoji. At $420 per share, a deal would be worth $72 billion overall.
Tesla shares were halted from trading at $367.25 United States dollars per share shortly after 2:00 pm for more than an hour after Musk's tweets.
Elon Musk has said taking Tesla private would provide the company with an "enormous opportunity". They closed at $379.57 - up 11 percent, but far from the $420 price Musk was dangling.
Musk and his luxury automaker have been under enormous pressure to overcome repeated delays and deliver on promises of producing 5,000 of Tesla's more affordable Model 3 cars per week.
The Silicon Valley company faces a make-or-break moment in its eight-year history as a public company as competition from European automakers is poised to intensify with new electric vehicles from Audi and Jaguar, with more rivals to follow suit next year. And the fact that the company has been burning through cash, and even asking suppliers to refund payments might make such a buyout fairly unlikely.
Musk said he wouldn't sell his stake if the company went private.
In his letter to employees, Musk also pointed to pressure from short sellers as a major downside to being a public company.
First, a final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best.
The billionaire Musk, who owns about 20 per cent of the company, said a transaction would not "substantially" alter his stake and that he expected to continue to lead the company if it occurred. He said in his letter to employees he did not seek to expand his ownership. A price of $420 a share would value the company at $72 billion, nearly double Ford. Shareholders would be given the choice to either remain an investor or be bought out at $420 a share, a 20-percent premium over the company's stock price after its second-quarter earnings call last week.
The most obvious equity partners for Musk would be a sovereign wealth fund such as Saudi Arabia's Public Investment Fund (PIF) or major technology investment funds such as SoftBank Group Corp's Vision Fund, bankers said. Netflix stock moved higher as a result.
"Earlier today, I announced that I'm considering taking Tesla private at a price of $420/share". Why would Musk want to take his company private? Public companies often have thousands of shareholders-ranging from huge pension plans and mutual funds to ordinary retail investors.
"As the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company", Musk said.
Tesla's shares jumped as high as US$371.15 in afternoon trading before trading was halted. Should the funding disclosure turn out not to be true, it could be viewed as "misleading", he warned.
Short sellers - investors who offer to sell shares in the stock in the future (that they may not own, which is legal) at a price lower than curent price, in hope the stock falls even more - were liable for $884 million in losses Tuesday. A spokesperson for the SEC declined to comment when reached by Gizmodo.