Musk says going private would free Tesla

Adjust Comment Print

During the conference call accompanying the results, Mr Musk said he expected the company to avoid going back to the markets for capital and to be "essentially self-funding on a go-forward basis".

Musk's target for taking the company private would value it at more than $82 billion, according to Bloomberg.

Musk did not disclose the source of the funding.

Tesla stock closed at $341.99 (£264.29 / €294.85) yesterday and rose rapidly following the announcement today.

"It's very unusual for any CEO other than Elon Mr Musk".

The billionaire Musk himself owns a bit more than 20 percent of Tesla stock. Regulators temporarily halted trading as pending news from the company swirled.

Meanwhile, Tesla has announced plans to build a factory in Shanghai, China, and another in Europe, but details are scarce and funding unknown. However, given Musk's lack of concern for industry norms and his ongoing feud with short-sellers, it's not out of the realm of possibility.

"He originally brought Tesla public in 2010, given he could no longer personally finance its growth, and has continually expressed his frustration with the company being public". He said in his letter to employees that he did not seek to expand his ownership.

In subsequent tweets on Tuesday, Musk said that he hoped all current investors would stay with Tesla even if it went private, and that he would be willing to create a fund to allow it. Public companies are companies whose shares are available for purchase by anyone on public markets like the New York Stock Exchange and the NASDAQ.

Samsung Could Keep Their Charger A Secret As Well
Notably, Samsung is hosting its "Unpacked" event on August 9 in NY , where it will launch the Galaxy Note 9 . Samsung is boasting an all-day battery with the Note 9 and it is expected to pack a huge 4000mAh battery .

Musk said in subsequent tweets that he would remain chief executive under a go-private transaction and that any deal would benefit shareholders.

In his typically unorthodox fashion, the eccentric Mr Musk dropped his bombshell on his Twitter account, which he has used as a platform for pranks, vitriol and now for a proposal to pull off one of the biggest buyouts in USA history.

Raising both the debt and equity required for such a deal would be a challenge.

Musk complains that Tesla is "the most shorted stock in the history of the stock market" and many people "have the incentive to attack the company".

It is probably worth mentioning that at the time of writing (Aug. 7, 2018, 4:30 pm EDT), Musk is $1.5 billion richer than he was 5pm EDT just the day before.

However, some analysts were skeptical that Mr. Musk could engineer a buyout. "I can't believe this is something to bluff or make fun of", George Galliers of Evercore ISI said. "Plus this is short squeeze rocket fuel after a nice quarter", said analyst Chaim Siegel from Elazar Advisors.

Trading resumed at 3:45 p.m., with the stock peaking at $387, not far from the company's intraday record of $389.61.

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.

Despite its challenges, Tesla has remained a favourite among many investors, partly due to their faith in Mr Musk, who made his initial fortune as a co- founder of PayPal and also is the chief executive of a trail-blazing aerospace company, SpaceX, that's already private.

Comments