Elon Musk tweets about taking Tesla private, shares soar

Elon Musk has confirmed that he wants to take Tesla private. Flickr Heisenberg media

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.

Technology dynamo Elon Musk announced Tuesday that he may take Tesla private, sending the Internet into a spiral of speculation about whether he was actually legit.

Wall Street might be reeling, but taking Tesla private has clearly been on Musk's mind for a while.

The SEC declined comment on Musk's tweet. Finally, 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.

It's not clear how and with whom the company has secured funding, or when the company will begin the formal process of buying up shares and taking itself off the NASDAQ stock exchange.

When the tweet-sized bombshell hit, Tesla's stock was already trading higher thanks to reports that a Saudi investment firm had amassed a 3 to 5 percent stake in Tesla. In follow-up tweets, Musk said shareholders could either sell at $420 or hold their shares and go private, adding that he was super appreciative of Tesla shareholders and would ensure their prosperity in any scenario. 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". The rally falling well short of $420 is a sign of market skepticism that Musk's plan is feasible.

Tesla CEO Elon Musk says he is considering taking the electric auto maker private.

The SEC has brought charges in the past in at least one case in which a man was accused of manipulating stock prices with false tweets and taking advantage of the reduced prices.


"Once Tesla enters a phase of slower, more-predictable growth, it will likely make sense to return to the public markets", he wrote.

Tesla shares have been on the upswing since it reported on August 1 a bigger-than-expected second-quarter but signalled that it expects to reach profitability in the third quarter and remain in the black for the foreseeable future.

Tesla's stock spiked Tuesday after Musk made the abrupt announcement in a terse tweet.

"Tesla's volatility makes it more of a trading stock than a value play", said Ihor Dusaniwsky, head of research at S3 in NY.

Third, the intention is not to merge SpaceX and Tesla. "I own about 20% of the company now, and I don't envision that being substantially different after any deal is completed".

Tesla said in a regulatory filing in 2013 that investors interested in keeping up with Tesla should follow Musk's account.

Tesla shareholders would need to vote in favor of going private before the decision is finalized, Musk concluded.

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