Elon Musk tweets about going private and shares 'skyrocket'

Elon Musk tweets about going private and shares 'skyrocket'

Elon Musk tweets about going private and shares 'skyrocket'

A price of US$420 a share would value the company at US$72b, nearly double Ford.

Mr Musk's statement came at a time when the electric auto maker faces financial constraints, and barely a week after the company announced it had made its biggest net loss to date of $717.5m (£547.6m) during the second quarter ending in June.

Taking Tesla private would certainly qualify.

The US Securities and Exchange Commission allows companies to use social media outlets like Facebook and Twitter to announce key information in compliance with its fair disclosure rules so long as investors have been alerted about which social media outlets will be used to disseminate such information. He later tweeted that the only uncertainty about completing the deal is whether he can gain shareholder approval.

The Financial Times, citing unnamed people with direct knowledge of the matter said Saudi Arabia's Public Investment Fund had built a stake of between 3 and 5 percent of Telsa's shares.

Camera IconTesla boss Elon Musk with the new Roadster.

Musk is power tweeting about the world's biggest leveraged buyout and the financial markets are full of hot takes.

That baseless tweet was quickly deleted and Mr Musk apologised to the diver.

The news caused Tesla's share price to jump by $14.

A company's CEO announcing a propsed buy-out on Twitter before notifying shareholders would be unusual in the extreme, which is driving caution among traders.

Asked on Twitter whether Musk would continue to be CEO under such a scenario, he replied there would be "no change". But he said the idea made a certain amount of sense. The price of $420 per share equates to a valuation of $70 B and Elon shared that he has already secured funding to make the move.

Camera IconTesla's existing shareholders could be given the option of retaining a stake in the company through a special fund.

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Tesla did not immediately confirm if Musk himself sent the tweet or if it was the result of a hack. About an hour and a half later trading resumed and rose by more than 11 per cent.

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

Following the company's surge after last week's earnings, Musk took aim again at a short-seller in a reported short YouTube video that likened these investors to Hitler's last days.

Tesla has burned through cash while struggling to produce the Model 3, its lowest-priced electric auto.

Such a deal, if it went ahead, would take Tesla out of the glare of Wall Street but might limit its access to capital.

Elon Musk said he's considering taking Tesla Inc. private in a radical step that, if successful, would ease pressure on the money-losing automaker.

USA securities law draws a distinction between private and public companies. He said wild swings in the stock price are a "major distraction" to workers and that being public "puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term".

Musk said he did not intend to increase the amount of the company that he owns, which is now about 20 percent, and that the intention of the privatization was to enable the company to operate more efficiently without having to worry about basing decisions short term market forces. Musk's tweetstorm was over, but Tesla's future was uncertain.

But another substantial segment of investors are convinced Tesla is doomed to fail and are betting on the company's eventual demise by becoming "short sellers" of its stock.

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 company had a market value of $58bn as of Monday's close.

In contrast, private companies have a smaller number of shareholders-generally fewer than 2,000-and are not available for purchase on public markets. "He will live to see another day".

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