Advertisement

Elon Musk suggests taking Tesla private, shares surge

Elon Musk, CEO of Tesla Motors Inc., talks during a news conference at the company's headquarters in Fremont, Calif. AP Photo/Marcio Jose Sanchez

Elon Musk is considering taking Tesla Inc private, the electric car maker’s chief executive tweeted on Tuesday.

“Am considering taking Tesla private at $420. Funding secured,” Musk said.

At $420 per share, a deal would represent a 22.8 per cent premium to Tesla’s closing price on Monday, making it one of the biggest go-private deals with a price tag of about $72 billion.

READ MORE: Tesla shares soar as Musk apologizes for behaviour during earnings call

Tesla’s shares were up 6.5 per cent at $363.46. The company had a market value of $58 billion as of Monday’s close. Musk owns nearly 20 per cent of the company.

Separately, Financial Times reported on Tuesday Saudi Arabia’s sovereign wealth fund, overseen by Crown Prince Mohammed bin Salman, has built an undisclosed stake of between 3 and 5 per cent stake in Tesla.

Story continues below advertisement
WATCH: Tesla CEO Elon Musk says he’ll help fix the Flint water crisis
Click to play video: 'Tesla CEO Elon Musk says he’ll help fix the Flint water crisis' Tesla CEO Elon Musk says he’ll help fix the Flint water crisis
Tesla CEO Elon Musk says he’ll help fix the Flint water crisis – Jul 12, 2018

“I believe Tesla considers Tweets as public disclosure. I think he’s serious. Plus this is short squeeze rocket fuel after a nice quarter,” said analyst Chaim Siegel from Elazar Advisors.

While Musk is known for making erratic tweets, he tweeted “420” in a reply to Fox Business anchor Liz Claman, following up on his initial tweet. The company did not immediately respond to request for comment.

READ MORE: Tesla shares fall after Elon Musk calls Thai cave rescuer ‘pedo guy’

“If true, this would be an incredible and surprising development. We still would see risk to completion of such a deal,” said CFRA analyst Efraim Levy.

He is also under intense pressure to prove he can deliver consistent production numbers for the Model 3 sedan, Tesla’s lowest-priced model and the key to its plans to become a mass-market automaker, after a host of manufacturing challenges and concerns it was burning cash too quickly.

Advertisement

Sponsored content