Published: Wed, August 08, 2018
Markets | By Josh Butler

Tesla boss Musk considering taking firm private

Tesla boss Musk considering taking firm private

He responded to one user who observed that going private would save Tesla "a lot of headaches".

Elon Musk's latest big idea is daring even by his standards: He wants to turn Tesla into a private company. "Given his historic frustration with short sellers, analysts and certain parts of the press, it is perhaps also not surprising that he has given consideration to taking the company private", Galliers said.

Tesla reported an adjusted loss per share of $3.06 for the second quarter, which was larger than what analysts had predicted, and revenue of $4 billion, which beat analyst projections. Musk would have to come up with $66 billion, according to Bloomberg. Regulators temporarily halted trading as pending news from the company swirled.

Shares of Tesla closed up 11% after being briefly halted in trading by the Nasdaq to release the letter.

What on earth is happening to Tesla stock today?

Musk later explained in an email to company employees why he is considering taking Tesla private, but also said "a final decision has not yet been made". 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.

In a statement giving to by Musk to Tesla employees, the chief executive said he wanted to move away from 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". He added that "being public means that there are large numbers of people who have the incentive to attack the company". "His mission for Tesla (to accelerate the globe's adoption of sustainable energy) is both grand and long-term, making it hard to accommodate investors quarterly expectations". That baseless tweet was quickly deleted and Mr Musk apologised to the diver.

"The internet means that someone like Elon Musk can say something and instantly the whole world can see it", Russell said.

China to hit back at USA with 60 billion dollars tariffs
Meanwhile, Chinese state TV said: "The White House's extreme pressure and blackmail are already clear to the worldwide community". The ministry said timing of the implementation of the new tariffs on United States goods would depend on the actions of the US.

Camera IconTesla boss Elon Musk with the new Roadster. According to Gene Munster of VC firm Loup Ventures, going private "makes a ton of sense", for the EV builder. Musk also pointed this out in his letter. Musk argues that this has allowed SpaceX to be far more "operationally efficient".

But time and again Musk and Tesla have been given more time to achieve success. They would continue to have separate ownership and governance structures. Investors in a privately held Tesla would probably have a chance to buy and sell stock every six months, as is the case at another of his companies, SpaceX. Here are a few things he gains by taking Tesla private.

Market cap equals shares of stock times stock price. Netflix stock moved higher as a result.

While it is unlikely the SEC will take action on Tuesday's tweet, there are a group of investors who are likely to sue.

However, some analysts were skeptical that Mr. Musk could engineer a buyout.

U.S. securities law draws a distinction between private and public companies. The company with the highest short interest among any American firm has been criticised for burning through cash.

Tesla shares have been on the upswing since it reported on August 1 a bigger-than-expected second-quarter but signalled that it expects to reach profitability in the third quarter and remain in the black for the foreseeable future. If we were to go private, employees would still be able to periodically sell their shares and exercise their options.

Despite the unfolding media "shitshow", Musk still seems to view privatization as an "enormous opportunity for us all".

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