Tesla Inc: Elon Musk says he's considering taking car-maker private
Aug 08, 2018, 05:01
A tweet from Tesla boss Elon Musk's account suggests he is "considering" taking the electric vehicle firm private. "Our guess is there is a 1 in 3 chance he can actually pull this off", wrote Gene Munster of Loup Ventures, adding that Mr. Musk's proposed premium over Tesla's existing share price might not be enough to persuade shareholders to sell.
The company had a market value of US$58 billion as of Monday's close. I own about 20% of the company now, and I don't envision that being substantially different after any deal is completed.
Forward-looking:Taking Tesla private could solve a lot of headaches for Musk but it wouldn't be cheap. Shares jumped in Tuesday trading following reports that the Saudi Arabian sovereign wealth fund took a $2 billion stake in the company earlier this year. The company said it expects to be profitable during the second half of 2018.
Shares of Tesla closed up 11% after being briefly halted in trading by the Nasdaq to release the letter.
While the decision isn't set in stone, Musk layout out a provisional plan to take the company private. 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.
"I believe Tesla considers Tweets as public disclosure".
Elon Musk is the world's 31st-richest person and Tesla's largest shareholder.
Tesla Motors CEO Elon Musk is considering taking the company private, saying it would be less distracting that the "enormous pressure" of meeting quarterly financial targets.
"The short position is the best thing the stock has going for it. "Musk vs The Shorts" is a far better narrative than 'Tesla vs Mercedes/Audi/Porsche, '" Chanos said.
Making money has proven elusive for Tesla while it has been investing in electric auto technology and ramping up production of its vehicles, including a sedan with a starting price of $35,000 to appeal to a broader audience. Employees would remain shareholders, and Tesla would be independent of Musk's other company, Space X, though the structures would be similar.
He has also had a prickly relationship with Wall Street, apologizing last week to equity analysts after refusing to answer questions on a May investor call.
Investors may be wondering what Elon is smoking this morning following a tweet in which he claimed he's considering taking Tesla private at $US420 ($566) per share.
It was not clear if Musk was serious as he has a history of erratic tweets, and the company did not immediately respond to request for comment.
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.
Tesla shares, which were already rising on news of the Gulf investor, spiked in response.
"Given his historic frustration with short sellers, analysts and certain parts of the press, it is perhaps also not surprising that he has given consideration to taking the company private".
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