Published: Wed, August 08, 2018
Finance | By Loren Pratt

Elon Musk says he's considering taking Tesla private

Elon Musk says he's considering taking Tesla private

Why would Musk want to take his company private?

A number of bankers and private-equity investors privately cast doubt on Elon Musk's ability to pull off a buyout of Tesla Inc. after he raised the possibility in a series of tweets Tuesday.

Still, the tech-heavy NASDAQ exchange where Tesla is listed halted trading over the uncertainty of whether Musk's tweet may have violated any Securities and Exchange Commission rules that prevent company executives from making market-moving statements. The rally falling well short of $420 is a sign of market skepticism that Musk's plan is feasible.

The tweets are the latest example of a long string of freakish outbursts from the billionaire tech mogul.

Taking Tesla private would certainly qualify.

Following the tweet, where Musk revealed he has already secured funding for the move, he sent an e-mail to employees explaining his reasons for wanting to go private.

Once private, Musk envisions setting Tesla up much like SpaceX (though he insisted the companies would remain separate): Only let external and employee shareholders buy or sell stock once every six months.

Musk has cut a controversial figure on social media and beyond, apologising last month for calling British caver Vernon Unsworth, who helped rescue 12 Thai boys from a cave a "pedo", short for paedophile, after Unsworth spoke dismissively of the Tesla chief's proposal for bringing the boys to safety. He would hold onto his shares, he added.

The contracts were bought minutes after the Financial Times, citing unnamed people with direct knowledge of the matter, reported Saudi Arabia's sovereign wealth fund has built a significant stake in Tesla. But later in the afternoon, trading in the stock was halted pending an official company announcement.

We reached out to Tesla to find out what this all means and will update when we hear more.

It's unclear from where Musk has secured funding. But Musk says that's not what he's expecting for Tesla.

Mr Musk has been under intense pressure this year to prove he can deliver on his promise to turn his money-losing company into a profitable higher-volume manufacturer.

The CEO apologized to those analysts during the second quarter call.

Second, my intention is for all Tesla employees to remain shareholders of the company, just as is the case at SpaceX. "Pedo" is short for pedophile.

But asked if he would take legal action against Musk over the allegation, Unsworth said: 'If it's what I think it is yes'.

"This has nothing to do with accumulating control for myself", he said. But Musk isn't one to follow norms.

In the note, Musk took a more measured tone.

"I believe Tesla considers Tweets as public disclosure".

'I am not a top donor to any political party, ' he said. He has also been embroiled in spats with journalists and analysts.

Musk has had a famously combative relationship with Wall Street, having mocked Tesla's short-sellers on Twitter and joked about Tesla going bankrupt. "Boring, bonehead questions are not cool".

Tesla did not immediately respond to a request for clarification.

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