Tesla Inc: Elon Musk says he's considering taking car-maker private

  • Tesla Inc: Elon Musk says he's considering taking car-maker private

Tesla Inc: Elon Musk says he's considering taking car-maker private

Musk triggered a spike in Tesla's share price shortly before 1 p.m. with a tweet: "Am considering taking Tesla private at $420".

"There's a lot of noise that surrounds a public company and people are constantly commenting on the share price and value", Musk said in 2015.

"Am considering taking Tesla private at $420. Funding secured", Musk wrote in his first tweet, following up with "good morning" and a smiley emoji. Reuters reported the stake was "at just below 5 percent". He repeatedly apologized to analysts during a second-quarter earnings call last week. The tweet prompted questions about how serious Musk's intentions were.

Tesla stock was halted for more than an hour and a half and resumed trading up 11 percent to $380.60 as of 3:49 p.m.in NY.

It's highly unusual for the head of a major company make a significant announcement in such casual manner.

Did Elon Musk violate any securities regulations, particularly Reg FD [Fair Disclosure], which according to the Securities and Exchange Commission, prohibits selective disclosure of material information? "This is not how you do it and it makes you wonder how seriously to take it", said Erik Gordon, a business and law professor at the University of MI.

Elon Musk, outspoken Tesla CEO, overnight set the internet alight when he tweeted: "Am considering taking Tesla private at $420".

Musk has a history of making bold statements on Twitter and walking back from the precipice after more careful consideration, but the more detailed email to employees seems to add credence to his plan to go private.

That price would represent a 22.8 per cent premium to Tesla's closing price on Monday.

Musk also owns about 10 percent of Space X, which is valued at $25 billion and a large portion of The Boring Company, which analysts have said could reach $16 billion in value if it executes on current contracts.

"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.

Musk's tweet comes as Tesla faces continued pressure to ramp up output of the Model 3 sedan, its first effort at the middle market.

In the letter, Musk lays out several reasons prior companies have left the public sphere: The quarterly earnings reports that may distract from a long-term picture, and scrutiny from short sellers. Tesla lost another $717.5 million in its most recent quarter.

The electric auto maker reported revenue of $4 billion in the second quarter of 2018, with $2.2 billion in cash in hand.

Despite its challenges, Tesla has remained a favorite among many investors, partly due to their faith in Musk, who made his initial fortune as a co-founder of PayPal and also is the CEO of a trail-blazing aerospace company, SpaceX, that's already private.

What on earth is happening to Tesla stock today?

Musk even had a price - $420 a share.

Musk and other investors may want to thank Netflix CEO Reed Hastings for these rules, which followed a Facebook post by Hastings in 2013 detailing key subscriber data. The company had a market value of $58bn as of Monday's close.

The bombshell proposal to take the electric vehicle maker private prompted regulators to take the unusual step early Tuesday afternoon of suspending trading in the company's stock.