Elon Musk Thinking About Taking Tesla Private at $420 a Share

08 August, 2018, 00:39 | Author: Billie Castillo
  • Elon Musk

Tesla's stock shot up sharply today after the company's billionaire CEO, Elon Musk, tweeted that he was considering taking Tesla private at a premium price of $420 a share.

The BBC has been unable to verify the post was written by Mr Musk himself, but it has pushed the shares 6% higher.

Trading in Tesla shares was halted on Tuesday, after a tweet by chief executive Elon Musk sent shares soaring by more than 7%.

Green Car Reports reached out to Tesla for comment and is awaiting comment.

Musk originally brought Tesla public in 2010 to help raise funds for the company's growth.

Musk has lashed out at critics and investors who have shorted the stock, going so far as to call one prominent critic's employer to silence him, and refusing to take a hard question from a financial analyst in the company's June shareholder meeting.

Musk said he has no intention of combining the electric vehicle maker and the private space company under one umbrella.

Trading was then halted on the stock market around 2 pm EST according to The Washington Post.

One block of 714 Tesla call options, betting on the shares rising above $365 by the end of the week, were bought for 85 cents, for a total outlay of $60,690, at 12:21 p.m. EDT.

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Forward-looking: Taking Tesla private could solve a lot of headaches for Musk but it wouldn't be cheap. Musk owns almost 20 percent of the company.

At $420 per share, a deal would represent a 23 percent premium to Tesla's closing price on Monday.

"I believe Tesla considers Tweets as public disclosure".

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

Munster also said he did not see legal risk from Musk's tweets due to the Reed Hastings Rule, an SEC guideline announced in 2013 that said it was OK for companies to reveal key information on social media as long as investors have been alerted.

But asked if he would take legal action against Musk over the allegation, Unsworth said: 'If it's what I think it is yes'.

"I can't believe this is something to bluff or make fun of".

In a letter to Tesla employees published on the company's blog https://www.tesla.com/blog/taking-tesla-private?redirect=no, Musk explained that such a move - over which no final decision had been made - would let Tesla "operate at its best, free from as much distraction and short-term thinking as possible".

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