Published: Wed, August 08, 2018
Economy | By Shawn Conner

Elon Musk tweets he may take Tesla private

Elon Musk tweets he may take Tesla private

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". It's not uncommon for trading in a stock to be halted in the wake of unexpected or unsettling news.

Musk and his luxury automaker have been under vast pressure to overcome repeated delays and deliver on promises of producing 5,000 of Tesla's more affordable Model 3 cars per week.

Musk has frequently expressed dismay at Tesla's treatment as a public company and has clashed with regulators, critics and reporters.

However, Mr Musk has said he has no plans to do so and promised that the firm will be profitable in the second half of the year, barring any unforeseen events.

In another tweet later in the day, Musk assured his vast network of followers that Tesla would remain loyal to those that had supported the company on the journey to where it was today.

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.

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Shares were pummeled in May after Musk abruptly cut off questions from Wall Street analysts over Tesla's spending plans.

While Mr Musk has previously discussed the drawbacks of being a public company, he has also used his Twitter account in ways that surprised investors.

Tesla CEO and founder of the Boring Company Elon Musk spoke at a news conference, June 14, in Chicago.

Tesla did not immediate respond to requests for comment.

The first tweet came hours after the Financial Times reported that Saudi Arabia's sovereign wealth fund had built a significant stake in Tesla, but it was unclear if that was the funding Mr Musk was referring to. The stock had been worth about $342 a share before Musk's tweet, and shares quickly jumped as high as $371.

Musk has followed up with an offer for current stockholders to keep their shares and "go private" - without knowing further details on the company's board and governance structure. The company had a market value of $58 billion as of Monday's close.

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Musk in the tweet said he is considering taking Tesla private at $420 per share, adding that funding for the potential move has already been secured.

"His mission for Tesla (to accelerate the globe's adoption of sustainable energy) is both grand and long-term, making it hard to accommodate investors quarterly expectations", he wrote.

The CEO apologized to those analysts during the second quarter call. "My hope is for all shareholders to remain, but if they prefer to be bought out, then this would enable that to happen at a nice premium", he said.

"Once Tesla enters a phase of slower, more-predictable growth, it will likely make sense to return to the public markets", he wrote.

He also said he would not sell his stake.

"Our guess is there is a one-in-three chance he can actually pull this off and bring Tesla private", Munster said.

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