Elon Musk details taking Tesla private, says final decision is pending

("Yes", Musk replied.) He expressed hope that current investors would stay with the company, later adding that shareholders could either "sell at [$420] or hold shares & go private".

"Am considering taking Tesla private at $420". He later tweeted that the only uncertainty about completing the deal is whether he can gain shareholder approval.

The company's stock had been up slightly earlier in the day after the Financial Times reported that Saudi Arabia had quietly built a large stake in Tesla. They closed at $379.57 - up 11 percent, but far from the $420 price Musk was dangling.

VideoJamie Albertine, Consumer Edge Research senior automotive analyst, discusses Tesla Inc.

It's not hard to imagine the gyrations that Tesla's stock would go through if Musk's plan was scrapped or substantially changed.

Musk did not elaborate how he had secured the funding that he had mentioned in his tweet - or which lender was leading the effort.

The unusual step taken early Tuesday afternoon came shortly after Musk dropped a bombshell on his Twitter account by announcing he had lined up the financing to buy all of Tesla's stock at $420 per share.

When asked on Twitter whether he was serious, Musk replied: "Yes.It saves a lot of headaches". "This is not how you do it and it makes you wonder how seriously to take it", said Erik Gordon, a business and law professor at the University of MI.

However, Musk expects the shareholders to agree with him and allow him to take the company private again.

Camera IconTesla boss Elon Musk with the new Roadster.

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In an internal email, sent from Musk to Tesla employees on August 7, the CEO confirmed most of this, as he explained his thinking directly.

Investors like billionaire George Soros now have the option to take advantage of Tesla's recovering share price, as the company's $920 million convertible bond due in March 2019 passed its $359.8676 conversion rate.

Taking Tesla private would certainly qualify.

Analysis: will the Model 3 make or break Tesla?

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". As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders.

He also said he would not sell his stake. "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".

What on earth is happening to Tesla stock today?

During a conference call in May, Mr. Musk shut down questions from analysts, calling them "boring" and spent much of the time talking to an investor who runs a YouTube channel, prompting an after-market sell-off of Tesla's shares.

FILE PHOTO: Elon Musk, founder, CEO and lead designer at SpaceX and co-founder of Tesla, speaks at the International Space Station Research and Development Conference in Washington, U.S., July 19, 2017.

(Copyright © 2015. All Rights Reserved.)
 
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