Published: Wed, August 08, 2018
Markets | By Erika Turner

Elon Musk considers a private Tesla in tweet, shares jump

Elon Musk considers a private Tesla in tweet, shares jump

By taking Tesla private, Musk believes that the company will be able to sharpen its long-term focus of revolutionizing an automobile industry dominated by fuel-combustion vehicles without having to cater to investors' fixation on how the business is faring from one quarter to the next.

The furor over Musk's tweets has led to a halt on $TSLA trading.

Mr Musk has been under intense pressure this year to prove he can deliver on his promise to turn his money-losing company into a profitable higher-volume manufacturer. At a share price of $420, the company would be worth $71.3 billion. The company had a market value of $58bn as of Monday's close.

Elon now owns about 20 percent of Tesla and so he would need something like $50 billion in additional capital to fully privatize the company, along with a shareholder vote of "yes" to the move.

At $420 a share, that means Musk would have to buy back Tesla at the whopping price of $82 billion, in what would likely be one of the largest take-private transactions in history.

In a letter to Tesla employees published on the company's blog here, Musk explained that such a move - over which no final decision had been made - would let Tesla "operate at its best, free from as much distraction and short-term thinking as possible".

Shares surged 11 percent to $379.57 at the closing bell after being suspended for about 90 minutes following a series of Musk statements on Twitter in which he initially floated the idea of going private.

China rejects United States demand to reduce Iran oil imports
China has however agreed it will not increase oil imports from Iran, in a move which would directly challenge the United States blockade.

The confusion caused by Musk's Tuesday announcement via Twitter also prompted regulators of the Nasdaq stock market to temporarily suspend trading in Tesla's stock.

From there Musk tweeted several times.

Green Car Reports reached out to Tesla for comment and is awaiting comment. Today's Tesla rally could make life more hard for shorts because brokers often ask shorts to put up more money when a stock they've shorted rises in value. If the process ends the way I expect it will, a private Tesla would ultimately be an enormous opportunity for all of us.

He also said he does not now have a controlling vote in the company and wouldn't expect a single shareholder to have one if the company were private.

Despite the unconventional method of disclosing such information, analysts took Musk at his word. Prices seesawed in the range of $360 to $370, a roughly 7 to 8 percent rise for the day, while investors tried to decide whether Musk was joking.

Last month, Musk attacked British diver Vern Unsworth, who had dismissed the Tesla chief's efforts to help the rescue mission for the 12 boys as a "PR stunt" in a widely seen interview on CNN.

A leveraged buyout of Tesla, which went public in 2010 on Nasdaq and which sports a market capitalization of almost $64 billion, or other take-private transaction would represent an abrupt change in financial strategy.

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