Here's why Elon Musk wants Tesla to go private

Here's why Elon Musk wants Tesla to go private

It's possible Musk could persuade some large institutional investors to remain shareholders in the private company, which could reduce his funding needs, Sacconaghi said.

Even for Musk, who is famous for firing out controversial tweets, Tuesday's message about possibly taking Tesla private astounded the Internet. This included discussing how being a private company could better serve Tesla's long-term interests.

Public companies have four days to report certain material events that shareholders should know about to the U.S. Securities and Exchange Commission.

Musk shocked the market, yet again with a tweet on Tuesday that he was considering taking the loss-making company private at $420 a share.

If Musk's tweet was indeed not a joke, another problem is that it could have been illegal.

The shares surged 11 percent to $379.57 on Tuesday after Musk said he's considering taking Tesla private at $420 a share, or an enterprise value of about $82 billion.

'Basically, I'm trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, ' Musk wrote.

Some Wall Street analysts are skeptical of Musk's ability to gather the financial backing to complete such a deal.

"Who gives $30 to $50 billion to buy back the shares?" asked NordLB analyst Frank Schwope. Among these issues, short-sellers have especially posed a continuous problem for Tesla, and it's no surprise Musk would like to put an end to the roller coaster that their actions can cause, with him highlighting the view that Tesla is one of most shorted companies on Wall Street. Many initially thought it was Elon Musk's attempt at a bad joke about marijuana, because "420" has always been associated with pot. Korus said he would need more details from Musk to judge whether a buyout offer would be practical and at what price it would be attractive.

Bloomberg's Selina Wang and Giles Turner reported that Musk and Son failed to reach an agreement over the structure of the company, citing sources.

On Tuesday morning, Musk emailed a statement to Tesla employees. He now owns 20 percent of the company, so more than $60 billion is needed to buy the business from public shareholders.

The statement was not from the company's full board of directors.

Other board members mentioned in the statement included Robyn Denholm, Ira Ehrenpreis, Antonio Gracias and Linda Johnson Rice. They did not include Mr Musk, his brother Kimbal Musk, and Steve Jurvetson, a venture capitalist.

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