Elon Musk Wants to Take Tesla Private at $420 a Share

Elon Musk

In addition to Tesla, he runs private space exploration firm SpaceX and tunnel-building and transit firm The Boring Company. "No way Elon, I'm keeping my stock", he said on Twitter. At $420 per share, a deal would be worth $72 billion overall.

In the post, Musk said that he feels a forward-looking company such as Tesla is better off being private and avoiding the short-term thinking involved with public markets.

Tesla shares are up more than 5 percent at $360.64.

Asked on Twitter whether Musk would continue to be CEO under such a scenario, he replied there would be "no change".

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.

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 been in a very public battle with these shorts for years.

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He also said he intends to give Tesla's existing shareholders the option of retaining a stake in the company through a special fund.

It's no joke that particularly in the USA and here in Australia, public companies are using share markets more for capital subversion, tax minimisation and corporate capture rather than truly creative, risky capitalistic endeavours.

Tesla is the most valuable automaker in the United States, and Musk's fights with investors - specifically short-sellers, who profit when the stock drops - are a running Silicon Valley sideshow. No final decision had been made, he said. "I own about 20 percent of the company now, and I don't envision that being substantially different after any deal is completed", he said. He said in his letter to employees he did not seek to expand his ownership.

A price of US$420 per share price would represent a almost 23 per cent premium to Tesla's closing price on Monday, which gave the company a market value of about US$58 billion.

In his letter, Musk suggested a choice for shareholders of selling their shares for $420 each or remaining investors in a private Tesla.

"My hope is *all* current investors remain with Tesla even if we're private", he added later.

Mr Musk's announcement was initially met with widespread scepticism, with many people connecting the proposed price to 420 being a common slang term for marijuana. Netflix stock moved higher as a result.

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Around 3:30 ET, Tesla released a statement via its blog, titled "Taking Tesla Private".

Musk complains that Tesla is "the most shorted stock in the history of the stock market" and many people "have the incentive to attack the company". The PIF is at the center of Saudi Arabia's efforts to diversify revenue away from oil under an economic transformation plan known as Vision 2030.

On April 1, amid rising market concerns about a cash crunch at Tesla, he tweeted an email announcing that Tesla would have to file for bankruptcy.

When Tesla was just getting started, issuing stock wasn't an issue - it's what a company with many years of growth is supposed to do.

Tesla did not immediately respond to a request for comment.

Musk laid out his rationale: As a public company, Tesla is subject to "wild swings" in its stock price that serve as "a major distraction".

Tesla shares rose 11 percent Tuesday, meaning short sellers lost about $1.3 billion in mark-to-market losses, according to estimates from Ihor Dusaniwsky, S3's head of predictive analytics.

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Or is it part of a wider phenomenon, combined with crowdfunding, seed/Angel venture capital and billionaire philanthropy whereby the primary and secondary public share market functions are being truly subverted.

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