Tesla Inc: Elon Musk says he's considering taking car-maker private

Elon Musk

"Funding secured." The news sent Tesla's share price surging more than 7 per cent before trading was briefly halted.

When Elon Musk tweeted he might take Tesla private, investors who were betting on Tesla stock falling lost nearly a billion dollars Wednesday. And if the information in the tweet isn't true, Musk could be looking at some stock price manipulation allegations. The email was published on Tesla's corporate blog.

Musk's tweet came two weeks after Tesla revealed it had burned through $739.5 million in cash on its way to a record $717.5 million net loss in the second quarter, as it cranked out more electric cars. Whether he meant to do that or not, his tweet certainly had that effect: By the time trading halted, Tesla's market value had soared to $61.74 billion, a significant raise from its pre-tweet $58 billion.

After rising as much as 8.5 percent, the company's shares gave up some of their gains.

I fundamentally believe that we are at our best when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we're all trying to achieve. "Given his historic frustration with short sellers, analysts and certain parts of the press, it is perhaps also not surprising that he has given consideration to taking the company private", Galliers said. That said, if they do want out, they can sell their shares at $420 per share, which is a fair bit higher than Tesla's current stock price ($382.67 at the time of writing, up from today's open price of $343.84).

Should Tesla decide to go down this route, it will need to be approved by a shareholder vote.

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In the post, Musk said that he feels a forward-looking company such as Tesla is better off being private and avoiding the short-term thinking involved with public markets.

Elon is right - going private would certainly reduce distractions surrounding the company's day-to-day activities, even if some of those concerns are valid. It also closely follows an announcement that Saudi Arabia's sovereign wealth fund has taken a 3 to 5 percent stake worth $2 billion in the company. Short sellers borrow shares from other investors and then immediately sell them on the premise that they will be able to buy them back at a lower price later to replace they stock they borrowed. He added that in the future, when Tesla reached a "phase of slower, more predictable growth", the firm could go public again.

Musk, however, did not elaborate on when the Tesla mini-car will hit the roads.

Musk's target for taking the company private would value it at more than $82 billion, according to Bloomberg.

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

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