Elon Musk Thinking About Taking Tesla Private at $420 a Share

Gladys Abbott
August 8, 2018

Nasdaq stock exchange halted trading in Tesla shares around 2.08pm local time.

The company's CEO, Elon Musk, made waves earlier in the day, tweeting he is considering taking the company private once its share price reaches US$420.

Officially, the SEC is fine with financial announcements on social media as long as investors are alerted to which platform they should be keeping an eye on and that no investors are given an advantage to receive the information first.

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.

The tweets have added to speculation about Tesla, which is spending heavily as it ramps up production of its latest auto, the Model 3.

Upon the news, Tesla stock quickly shot up to $365, climbing toward $420 - the amount Musk noted would be the trigger price.

Musk detailed his proposal in a blog post on the company's website Tuesday, hours after stunning the company's followers by casually tweeting that he might take it private. It was stake of about $1.9 billion to $3.1 billion, or 3-5 percent of Tesla shares, at current share prices.

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Tesla CEO Elon Musk's surprising proposal to take the electric vehicle maker private has prompted regulators to suspend trading in the company's stock. By going private, Tesla will lose that convenient source of financing, something that could cause massive headaches if the company continues to burn through cash as much as it has in recent years, Mr Ramsey said. The company had a market value of $58bn as of Monday's close. He says the move could be structured so that so that all shareholders will have a choice to remain investors in the private company or sell their stock for $420 (£324.58 / €362.11) per share.

"Am considering taking Tesla private at $420".

Earlier in the day, Tesla shares had worked their way on word of a new stake in Tesla from the Saudi Arabia sovereign wealth fund, according to Financial Times.

That could lead to a short squeeze - where bearish traders are forced to buy shares to avoid big losses, pushing the stock higher - Dusaniwsky said. On the other hand, many of Tesla's most passionate backers bought stock because they believe the price will eventually go to stratospheric levels.

In the letter, Musk lays out several reasons prior companies have left the public sphere: The quarterly earnings reports that may distract from a long-term picture, and scrutiny from short sellers. He also notes that Tesla would likely go public in the future after entering a "phase of slower, more predictable growth". This would enable you to still share in the growing value of the company that you have all worked so hard to build over time.

"This has nothing to do with accumulating control for myself", Musk said in the Tuesday email.

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