Elon Musk: a private Tesla would be an 'enormous opportunity'

Flags fly over the Tesla Inc. Gigafactory 2 which is also known as RiverBend a joint venture with Panasonic to produce solar panels and

Flags fly over the Tesla Inc. Gigafactory 2 which is also known as RiverBend a joint venture with Panasonic to produce solar panels and

In his typically unorthodox fashion, the eccentric Mr Musk dropped his bombshell on his Twitter account, which he has used as a platform for pranks, vitriol and now for a proposal to pull off one of the biggest buyouts in U.S. history. Many major Wall Street bankers contacted by Reuters said on condition of anonymity that they were not aware of Musk's plans ahead of his tweets, and several expressed scepticism that a leveraged buyout of Tesla could be financed given the company's negative cash flow. He said his own stake of about 20 percent would not be "substantially different" if the plan were to proceed.

He also said he intends to give Tesla's existing shareholders the option of retaining a stake in the company through a special fund. Taking Tesla out at $420 would make that promise true, and put Tesla's funding under less scrutiny. He later tweeted that the only uncertainty about completing the deal is whether he can gain shareholder approval. Funding secured."Musk's tweet followed a report from the Financial Times that the Public Investment Fund of Saudi Arabia had acquired a $2 billion stake in the company".

"This is a boon for any bondholder at Tesla, because most of the bonds are convertible notes".

VideoJamie Albertine, Consumer Edge Research senior automotive analyst, discusses Tesla Inc.

Elon Musk shocked Tesla investors - and the Twittersphere - on Tuesday by announcing on the microblogging site that he wants to take his company private.

Whether Musk's tweet was ethically proper or not, all of the experts interviewed by FOX Business agree the move was unprofessional at best.

The company had a market value of US$58 billion as of Monday's close. Although it's unusual for a chief executive to make such a major announcement over social media, it does not appear to be improper.

Did Elon Musk violate any securities regulations, particularly Reg FD [Fair Disclosure], which according to the Securities and Exchange Commission, prohibits selective disclosure of material information? But he said the idea made a certain amount of sense.

He said he was thinking about taking the electric auto company private, and already had the funding lined up.

The following email was sent to Tesla employees today:Earlier today, I announced that I'm considering taking Tesla private at a price of $420/share.

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Tesla shares are up more than 5 percent at $360.64.

One of the more notable short sellers in Tesla's stock, Jim Chanos of Kynikos Associates, commented on Musk's tweet to CNBC.

Making money has proven elusive for Tesla while it has been investing in electric auto technology and ramping up production of its vehicles, including a sedan with a starting price of $US35,000 to appeal to a broader audience. No final decision had been made, he said.

"I believe Tesla considers Tweets as public disclosure".

The electric auto maker reported revenue of $4 billion in the second quarter of 2018, with $2.2 billion in cash in hand.

Musk said that he hoped all current investors would stay with Tesla even if it went private. Musk has insisted Tesla has no such need.

The broader timing of the tweet is also suspect, given Musk's recent public denunciations of Tesla's (equally vocal) critics. Short sellers borrow shares from other investors and then immediately sell them on the premise that they will be able to buy them back at a lower price later to replace they stock they borrowed.

"Our guess is there is a one-in-three chance he can actually pull this off and bring Tesla private", Munster said.

"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", Musk said.

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