Elon Musk
Tesla chief executive officer Elon Musk is “considering” going private with the electric car company at US$420 a share and says on Twitter he has investor support.
Musk explained to Tesla staff in an email his “rationale for this, and why I think this is the best path forward”.
“First, a final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best.
“As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders. Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term. “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 unclear around the details about how Musk could make Tesla private.
He would make an offer to buy out Tesla stock at US$420 per share, but says shareholders will have a choice whether to sell at that price or remain with the company as it went private. Going private requires a shareholder vote, he tweeted.
Tesla shares have climbed since the announcement.
Musk has indicated Tesla may eventually return to being a publicly listed company once it has slower, more predictable growth.
