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.
Several financial industry insiders were unclear why trading was halted, whether it's because Musk is trying to initiate a buyout or because he could be violating FCC regulations. Musk has had feuds with regulators, critics and reporters, and questions remain about Tesla's production and manufacturing difficulties, long-term demand for its cars and uncertainty over funding. Employees would remain shareholders, and Tesla would be independent of Musk's other company, Space X, though the structures would be similar.
However, Mr Musk has said he has no plans to do so and promised that the firm will be profitable in the second half of the year, barring any unforeseen events.
Musk's Hubris May Take Tesla Stock Private?
It is probably worth mentioning that at the time of writing (Aug. 7, 2018, 4:30 pm EDT), Musk is $1.5 billion richer than he was 5pm EDT just the day before.
George Galliers of Evercore ISI said he believed the tweet was serious.
Going private is one way to avoid close scrutiny by the public market as Musk and the company face those challenges.More news: Android 9 'Pie' has officially launched with a focus on artificial intelligence
Tesla CEO and founder of the Boring Company Elon Musk spoke at a news conference, June 14, in Chicago. The Financial Times reported Tuesday that Saudi Arabia's sovereign wealth fund had recently amassed a US$2-bilion stake in Tesla.
"Musk does not want to run a public company", said Gene Munster of Loup Ventures, as Tesla's ambitious mission makes it "difficult to accommodate investors' quarterly expectations". "Funding secured." Tesla's stock jumped, triggering a halt for an hour or so before trading resumed at about $380.
"As the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company", Musk said. And if the information in the tweet isn't true, Musk could be looking at some stock price manipulation allegations. He went on to say he hopes all shareholders stick with the company but, if not, this is their time to exit while still making a "nice premium". "His mission for Tesla (to accelerate the globe's adoption of sustainable energy) is both grand and long-term, making it hard to accommodate investors quarterly expectations".
Around 3:30 ET, Tesla released a statement via its blog, titled "Taking Tesla Private".
A spokesman for Tesla did not immediately return a request for comment.
He stunned investors on Tuesday with a tweet saying he had already lined up the funding, and he told employees that it would relieve the electric vehicle company of the "enormous pressure" of Wall Street's expectations.