Published: Wed, August 08, 2018
Business | By Tara Barton

Elon Musk indicates taking Tesla private as he posts 'funding secured' tweet

Elon Musk indicates taking Tesla private as he posts 'funding secured' tweet

Musk detailed his reasoning for taking Tesla private in an email to employees that he later posted on the Tesla corporate blog.

"Tesla's volatility makes it more of a trading stock than a value play", said Ihor Dusaniwsky, head of research at S3 in NY.

The inefficiency that Musk lamented has been on vivid display for all of 2018, as Tesla's existence has been fought over by long-term investors and short-sellers.

Tesla has been publicly traded since 2010, and has seen its share price rise from just under $20 then to $360 at time of writing.

Whether Musk's tweet was ethically proper or not, all of the experts interviewed by FOX Business agree the move was unprofessional at best.

Shares quickly jumped as high as $371.

Tesla Motors started selling its stock to the public in 2010 - the first initial public offering of a US automaker in more than a half-century. "It actually makes us less efficient to be a public company". Sometimes trading in stocks is even suspended while a company prepares a big announcement.

But Musk seemed to relish the tumult.

"Good morning", he tweeted less than an hour later, adding a smiling emoji.

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As a private company, Tesla would not be required to report quarterly results, freeing it from Wall Street pressure and giving the company a longer-term window to achieve Musk's goal of a renewable-energy future.

"I wish we could be private with Tesla", he told Strauss. Musk owns almost 20% of the company. "Funding secured", Musk tweeted in early afternoon. He reiterated that he would ensure the "prosperity" of Tesla shareholders "in any scenario".

Musk has lashed out at critics and investors who have shorted the stock, going so far as to call one prominent critic's employer to silence him, and refusing to take a hard question from a financial analyst in the company's June shareholder meeting. The most telling quote, for the financial community, from Neil Strauss' Rolling Stone profile previous year had nothing to do with Musk's romantic life (he asked Strauss for dating advice).

He says no final decision has been made. "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".

The tweet prompted questions about how serious Musk's intentions were. Those who stay onboard would be able to sell shares or execute stock options approximately every six months. "I own about 20% of the company now, and I don't envision that being substantially different after any deal is completed".

"Investor support is confirmed".

The whole thing isn't yet set in stone because it must be put to a shareholder vote.

Bullish on the performance and increased production of "Model 3" cars, Tesla CEO Elon Musk is now planning to introduce a mini-car.

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