Elon Musk tweets he has funding to take Tesla private

Elon Musk tweets he has funding to take Tesla private

Troy Powers
August 8, 2018

Trading was then halted on the stock market around 2 pm EST according to The Washington Post.

Scottish money manager Baillie Gifford, which recently urged Musk to focus less on tweeting and more on running the business, is the fourth-largest shareholder, with a almost 8% stake.

"My intention is for all Tesla employees to remain shareholders of the company, just as is the case at SpaceX", Musk said.

When asked on Twitter whether he was serious, Musk replied: "Yes". 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. With approximately 170 million outstanding shares, Musk's proposed privatization of the company at $420 per share would require $71.4 billion, about a 17 percent increase.

Tesla's shares were up 6.5% at $363.46.

On April Fool's Day, Mr Musk, who owns nearly 20% of the company, joked on Twitter about Tesla going bankrupt.

The company did not immediately respond to requests for comment.

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That said, if they do want out, they can sell their shares at $420 per share, which is a fair bit higher than Tesla's current stock price ($382.67 at the time of writing, up from today's open price of $343.84). "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".

He has chastised reporters for focusing on accidents of autonomous cars instead of their safety potential, and accusing one news organisation of being "relentlessly negative" about Tesla.

And yet it also left many questions unanswered, namely how Musk - who owns nearly 20 percent of the company - would be able to come up with the $66 billion necessary to complete the transaction. "The 16 percent premium to the current share price may not be high enough to incentivize existing shareholders to support the sale".

It's unclear what prompted the tweet.

If Musk succeed in taking Tesla private, it would be the largest leveraged buyout of all time, beating the record set by the $45 billion deal for Texas power utility Energy Future Holdings, which ended in bankruptcy in 2014.

Musk has long voiced annoyance with the public markets, where the company is beholden to investors and must report quarterly on its losses.

"I believe Tesla considers Tweets as public disclosure", said analyst Chaim Siegel from Elazar Advisors. They are also shielded from the ups and downs of the stock market.