Elon Musk 'considering taking Tesla private'by Justin King
The move would help the company avoid persistent drama with short sellers.
Tesla CEO Elon Musk has indicated that he may push to transition the company back to a privately held entity.
"Am considering taking Tesla private at $420. Funding secured," he wrote on Twitter.
TSLA shares are currently trading around $367, with Musk retaining the largest single stake. The stock has the highest value of short interest among any publicly traded company. Musk has been at war with short sellers, lamenting that such investors have become cheerleaders for Tesla's demise.
Taking Tesla private would eliminate the problems Tesla has had with short sellers, exacerbated by Musk's history of announcing extremely ambitions timeframes and then falling behind schedule on projects.
Musk's other big ventures, SpaceX and Boring Co, are both privately held entities that enjoy little controversy in their quest to disrupt industries.
"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," Musk wrote in a letter to employees, later posted on Tesla's blog. "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."
The proposal must first pass a shareholder vote. Musk expects to retain his stake of around 20 percent, and Tesla and SpaceX will remain separate entities with their own ownership and governance structures.
"My hope is *all* current investors remain with Tesla even if we're private," Musk wrote on Twitter. "Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelity's SpaceX investment."
Absolutely. Am super appreciative of Tesla shareholders. Will ensure their prosperity in any scenario.— Elon Musk (@elonmusk) August 7, 2018