Tesla Could Become A Private Firm For $420 Per Share - said Elon Musk

On Tuesday, Tesla CEO Elon Musk said on Twitter that he would like to take the electric car company private, albeit the final decision has still been under consideration. The news sent shockwaves through the financial system.

Tesla CEO Elon Musk said on Twitter that he would like to take the electric car company private

Elon Musk, then, posted a letter on Tesla’s website following a short announcement on Twitter to clarify his possible intention. The CEO wrote

“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, all of whom are shareholders. Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term.”

"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"

Musk also adds that he secured the financing to take the carmaker private at $420 a share. Accordingly, Tesla’s stock price was up sharply by 11 percent and ultimately closed the day up 10.99 percent, as a direct result of Musk’s announcement. Musk wrote that current investors can remain in case that Tesla goes to private.

“Investors in a private company or they can be bought for $420 per share, which is a 20 percent premium over the stock price following our Q2 earnings call.” 

Musk also added

“This has nothing to do with accumulating control for myself. I own about 20 percent of the company now, and I don’t envision that being substantially different after any deal is completed.” 

Operating efficiently is one of Musk’s overall goal for Tesla. He believes it will be best accomplished if it’s a private company. He mentioned SpaceX as one example.

"Basically, I'm trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible," 

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