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article imageTesla CEO Elon Musk considering taking the company private

By Karen Graham     Aug 7, 2018 in Business
Tesla CEO Elon Musk stunned investors Tuesday with a string of tweets saying he is considering taking the company private, in what would be the largest deal of its kind.
Well, there's nothing more mind-boggling than an announcement coming out of left field, but that is exactly what has happened when Elon Musk initially took to Twitter a bit after lunchtime today to say he was thinking about taking the company private.
The announcement stunned investors and sent Tesla’s stock price soaring as much as 13 percent. It followed the news that Saudi Arabia’s sovereign wealth fund had built a less than 5 percent stake in Tesla worth about US$2 billion, according to the Financial Post.
"Am considering taking Tesla private at $420. Funding secured," Musk said in a tweet shortly before 1 p.m. Musk discussed the plans further in a blog post later Tuesday.
According to CNBC Musk explained in a blog that "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," he added. Musk went on to say that being a public company put "enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term."
Musk said he could take the company private at $420 per share, compared with today's opening price of less than $344. Such a deal would value the company at around $82 billion.
Musk also said that investor support for the plan "is confirmed," and the current indecision on his part is contingent on a shareholder vote. Tesla shares reopened up 10 percent after being halted for more than an hour.
CNBC contacted a number of Wall Street banks and none of them was aware of any transaction or had committed to funding a leveraged buyout of Tesla, which would be one of the biggest in history. And while many on Wall Street think Musk's way of doing things via tweets is "unorthodox," the Securities and Exchange Commission declined to comment on the matter.
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