“Am considering taking Telsa private at $420. Funding secured,” his tweet read.
In a blog post, Musk revealed his thinking, stating that “a final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best”.
He noted that “wild swings” in stock prices can be a “major distraction” for Tesla employees (all of whom are shareholders); and added that mandatory quarterly earnings cycle places “enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term”.
“As the most shorted stock in the history of the stock market,” he wrote, “being public means that there are large numbers of people who have the incentive to attack the company”.
He admitted that if the decision to take Telsa private went ahead, it may not make sense to keep it that way over the long-term. “Once Tesla enters a phase of slower, more predictable growth, it will likely make sense to return to the public markets”.
There have since been around 5.6 thousand comments on Musk’s original Tweet, with Musk responding several times on the thread. In one tweet, he said his “hope is all current investors remain with Tesla”. If the car company is to go private, he explained that a special purpose fund would be created to enable “anyone to stay with Tesla”. Alternatively, shareholders could sell their shares at $420.
According to a report by CNBC, Telsa’s current market value is $61bn. At a share price of $420, it would be worth $71.3bn.
“This has nothing to do with accumulating control for myself,” Musk wrote in his blog post. “I own about 20% of the company now, and I don’t envision that being substantially different after any deal is completed.”
Tesla has confirmed it is considering Musk's proposal to take the company private. Musk “opened discussions” last week with the company’s board, Telsa revealed. Since then, the company has met several times and are now evaluating the next steps.