Elon Musk indicates taking Tesla private as he posts 'funding secured' tweet

Elon Musk indicates taking Tesla private as he posts 'funding secured' tweet

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. At $420 per share, a deal would be worth $72 billion overall.

What Musk will ultimately do with the company remains to be seen.

Tesla's shares jumped as high as $371.15 in afternoon trading.

It's also unclear whether the tweet could get Musk in trouble with the U.S. Securities and Exchange Commission. Tesla has always been one of the most-shorted stocks on Wall Street, but so far, the company has not seen the share-price meltdown that shorts expected.

Going private is one way to avoid close scrutiny by the public market as Musk and the company face those challenges. However, given Musk's lack of concern for industry norms and his ongoing feud with short-sellers, it's not out of the realm of possibility. (Musk said in his Tesla blog post that he held a 20 percent stake.) He said that if the plan goes forward, shareholders would cast the deciding vote. He said in his letter to employees that he did not seek to expand his ownership.

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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. On the other hand, many of Tesla's most passionate backers bought stock because they believe the price will eventually go to stratospheric levels. "There is a 1 in 3 chance he can actually pull this off and bring Tesla private", said Munster, adding that even at a market capitalization based on a $420 share price, it "may not be high enough to incentivize existing shareholders to support the sale".

"There's a lot of noise that surrounds a public company and people are constantly commenting on the share price and value", Musk said in 2015. He made no mention in his tweets or his letter of where the funding for a deal would come from. But Musk said he'd look for a way to allow current Tesla shareholders to continue holding Tesla stock. They were initially driven higher after the Financial Times reported Saudi Arabia has quietly built a big stake in Tesla.

The tweet "might constitute fraud if any of the facts he disclosed are not true", Pitt said on CNBC.

The stock was halted at $366.94 per share.

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