Elon Musk considers taking Tesla private

Elon Musk considers taking Tesla private

Tesla CEO Elon Musk is gearing up to lead a buyout of the electric auto maker in a stunning move that would end the maverick company's eight-year history trading on the stock market.

Tesla's shares were up 6.5pc at $363.46.

At $420 a share, that means Musk would have to buy back Tesla at the whopping price of $82 billion, in what would likely be one of the largest take-private transactions in history.

Elon Musk said he's considering taking Tesla Inc. private in a radical step that would ease pressure on the money-losing automaker. The Financial Times reported Tuesday that Saudi Arabia's sovereign wealth fund had recently amassed a US$2-bilion stake in Tesla. In his blog post, he said the shorts had "perverse incentives" for trying to harm the company.

When NASDAQ trading was stopped, Tesla's shares were at $366.94, a 7.3 percent gain.

Musk has every incentive to try to either drive up the stock price or eliminate the need for public reporting on sales and finances by taking the company private.

The bombshell proposal to take the electric auto maker private prompted regulators to take the unusual step early Tuesday afternoon of suspending trading in the company's stock.

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His asking price of $420 would be 22 percent of Monday's closing share price, and almost 9 percent above the stock's all-time closing high of $385.

In an interview with Bloomberg News in January 2015, he spoke of the benefits of running his closely held rocket company Space Exploration Technologies Corp. and his frustrations with having taken Tesla public in June 2010.

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 said is considering taking the company private at $420 a share and already has secured funding.

Musk amplified this point on Tuesday, saying on Twitter that going private "will be way smoother", end "negative propaganda from shorts" and benefit shareholders.

After his initial tweet, he followed up several times when answering questions from users on the platform. He said he is considering taking the company private, in what would be one of the largest deals of its kind ever. Investors have also applauded Mr. Musk's efforts to rein in spending and boost Model 3 production to 5,000 vehicles a week, in part by running production lines inside a giant tent on the grounds of Tesla's Freemont, Calif., factory. Will be way smoother & less disruptive as a private company. I think he's serious.

But the market appeared to take him seriously with Tesla shares surging on the news.

In his letter to employees, Musk also pointed to pressure from short sellers as a major downside to being a public company.

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