Elon Musk Proposes Taking Tesla Private

[William Maley]

Yesterday afternoon, Tesla CEO Elon Musk tweeted this

This sent everyone into a tizzy, wondering if he was being serious or not. In fact, NASDAQ had to halt trading of Tesla for a couple of hours because of this tweet. Thankfully, Tesla posted an email that was sent by Musk to employees explaining why. The key reason comes down wanting to minimize distractions and begin focusing on the long term.

"But the reason for doing this is all about creating the environment for Tesla to operate best. 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. Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term," Musk wrote in the email.

Musk also made light of the short sellers who bet against Tesla succeeding, saying the company was the most shorted stock "in the history of the stock market". By going private, it gives the company some protection.

How would this changeover to private work? Musk said he would like to offer shareholders to either remain or sell their shares at $420 per share (a bit higher than the $375.16 share price at the time of this writing). He would also like Tesla's employees to remain as shareholders.

"Basically, I'm trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible," the email states.

This move will need to be approved by Tesla's board of directors. In a statement released this morning, several members of the board published a statement that echoes the reasons given by Musk. It also reveals that this idea had been on Musk's mind for sometime.

"Last week, Elon opened a discussion with the board about taking the company private. This included discussion as to how being private could better serve Tesla's long-term interests, and also addressed the funding for this to occur. The board has met several times over the last week and is taking the appropriate next steps to evaluate this," the statement says.

One of those "appropriate next steps" is getting enough money to do the buybacks. Musk in his tweet said he has funding for it, but it is unclear who and how much is being provided. According to MarketWatch, the buyout would total $72 billion if all of the shareholders decide to sell.

Source: Tesla, MarketWatch

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[G. David Felt]

I have to wonder how much of his Tweeting clashes with the SEC and FTC rules? ?

Gotta think that this is part of his attack to hurt Short Sellars. Currently it looks like according to other news stories cost short sellars up to $13 billion dollars. Crazy times we live in.  

[riviera74]

Maybe, but it would actually solve the real issue: distractions.  Wall Street ALWAYS wants its needs served first, last and always.  The best thing is to NOT go public unless you (i.e. the CEO) are willing to deal with all the demands of sell-side and buy-side analysts and hedge funds and the like.  Tesla does not NEED to be a public company.  Wall Street does.

[regfootball]

figuring out how to manufacture and produce products on time and with quality, and satisfying your investors,

it's a bitch, isn't it?

[smk4565]

Maybe he will do it, I don't know how much more money he has to increase his ownership stake, but I am sure he can also find some other firm to buy uptake shares and Elon can take even greater control doing what ever he wants.  

One day Elon will hide 5 Golden Tickets in Tesla cars to be sold over a 3 month period, and those 5 individuals will get a factory tour and tour of Elon's office, in which one of those five will inherit his fortune at the end.

[regfootball]

Maybe he'll sell to some Saudi investors.

[Drew Dowdell]

<-- musk to investors