Elon Musk tweets he may take Tesla private

Elon Musk tweets he may take Tesla private

Elon Musk tweets he may take Tesla private

The company's shares rose more than 7% on the news, before Tesla trading was halted.

Additionally Musk added "funding secured" - which raises legal issues about blasting that information out in a tweet.

In his typically unorthodox fashion, the eccentric Musk dropped his bombshell on his Twitter account, which he has used as a platform for pranks, vitriol and now for a proposal to pull off one of the biggest buyouts in US history.

The firm's shares climbed more than 6% after the tweet, but the Nasdaq later halted trading pending an announcement.

Supporters of Musk and the company view him as a visionary akin to Apple co-founder Steve Jobs, while critics have likened him to a "Wizard of Oz" like figure who has yet to turn a profit.

Just under two hours after posting the Tweet about potentially going private, Musk took to Twitter again saying shareholders could either sell at the $420 price or hold onto the shares as the automaker goes private.

Earlier in the day, the Financial Times reported that Saudi Arabia's sovereign wealth fund had built an undisclosed stake of between 3% and 5% in Tesla.

Tesla did not immediately confirm if Musk himself sent the tweet or if it was the result of a hack. In a May earnings call, Tesla shares slipped after Musk derided "boring, bonehead" questions from analysts regarding the company's finances. A Tesla spokesman declined to comment.

But another substantial segment of investors are convinced Tesla is doomed to fail and are betting on the company's eventual demise by becoming "short sellers" of its stock.

"I'm trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible", Musk said.

He also tweeted that his "hope is all current investors remain with Tesla even if we're private". Depending on the follow-through, or lack thereof, Musk's statements could cause problems with the Securities and Exchange Commission. Musk noted that the price represented a 20% premium over the company's share price after last week's second-quarter earnings report. The company said it expects to be profitable during the second half of 2018.

It is far from the first time Musk has dropped a financial bomb to his 22 million Twitter followers.

A leveraged buyout of Tesla, which went public in 2010 on Nasdaq and which sports a market capitalization of almost $64 billion, or other take-private transaction would represent an abrupt change in financial strategy. "He originally brought Tesla public in 2010, given he could no longer personally finance its growth, and has continually expressed his frustration with the company being public".

This is especially true for a company like Tesla that has a long-term, forward-looking mission.

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