Musk says going private would free Tesla

George McgeeAug 08, 2018

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".

Shares in Tesla hit $367.25 after a message posted at 9.48am NY time on Mr Musk's verified Twitter account said: "Am considering taking Tesla private at $420".

Earlier today, I announced that I'm considering taking Tesla private at a price of $420/share. The stock then plunged to as low as $244.59 in April as the company struggled to meet production targets for its Model 3 sedan and Moody's Investors Service cut Tesla's credit rating deep into junk-bond territory.

Short-sellers, who had been saddled with sharp losses earlier this month after Tesla shares soared following quarterly results, suffered paper losses of about $1.3 billion and were now $3.03 billion in the red for the year, according to S3.

The tweet suggested Mr Musk was looking at a plan to buy outstanding shares in the firm for $420 each, around a fifth higher than the share's current price.

Tesla and its investors are no stranger to seeing the company's share price follow a rollercoaster trajectory.

In his letter to employees, Musk also pointed to pressure from short sellers as a major downside to being a public company.

Tesla shares have been on the upswing since it reported on August 1 a bigger-than-expected second-quarter but signaled that it expects to reach profitability in the third quarter and remain in the black for the foreseeable future.

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. Shares in Tesla were up sharply following the tweet, trading at $363 at the time of writing. The tweets came not long after a report that Saudi Arabia's sovereign wealth fund has built a $2 billion stake in Tesla. He says the move could be structured so that so that all shareholders will have a choice to remain investors in the private company or sell their stock for $420 (£324.58 / €362.11) per share.

"Elon Musk does not want to run public companies", Munster said.

The Wall Street regulator did not immediately respond to a request for comment on Musk's tweet.

One block of 714 Tesla call options, betting on the shares rising above $365 by the end of the week, were bought for 85 cents, for a total outlay of $60,690.

The goal, Musk added, was not to tighten his grip on Tesla. Additionally, the Tesla bull weighed in on the likelihood of Musk taking the company private.

Trading of Tesla sharesresumed after the company published the statement and the stock closed at $379.57, up almost 11 percent for the day.

"This has nothing to do with accumulating control for myself", Musk wrote.

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