Here's why Elon Musk wants Tesla to go private

Here's why Elon Musk wants Tesla to go private

Here's why Elon Musk wants Tesla to go private

Musk owns an nearly 20 per cent stake in Tesla, meaning he'd still need roughly $70 billion in financing to take Tesla private.

China's Tencent Holdings Ltd (0700.HK), which took a 5 percent stake in Tesla past year, could also be a possible partner.

Musk has 22.3 million followers on Twitter, and Tesla's share price was already rising after the Financial Times reported that Saudi Arabia's sovereign wealth fund had taken a $2bn stake in the company.

Earlier today, Elon Musk did what he does best and set the internet ablaze - this time, based on a tweet about potentially taking Tesla private again. This proposed route would also keep all Tesla employees as shareholders/investors in the company, while Tesla would adopt an ownership and governance structure similar to the current form of SpaceX.

Musk also made mention of the "shorts", investors who bet against Tesla succeeding in order to profit themselves.

The move to take the company public would remove Musk, who himself has a 20 percent stake, from the public arena - and contentious criticism.

The company is still working its way out of what Musk called "production hell" at its home factory in Fremont, California, where a series of manufacturing challenges delayed the ramp-up of production of its new Model 3 sedan, on which the company's profitability rests.

He said that would allow Tesla to "operate at its best, free from as much distraction and short-term thinking as possible". The fund then reportedly proceeded to buy large amounts of Tesla stock on secondary markets, according to the Financial Times, and is now one of Tesla's eight biggest shareholders. It was pretty quick and seemed to handle well enough. "If the process ends the way I expect it will, a private Tesla would ultimately be an enormous opportunity for all of us".

"This proposal to go private would ultimately be finalized through a vote of our shareholders", Musk said in explaining the potential move.

"This is out there, even for Tesla", analysts with Barclays wrote Wednesday. Many initially thought it was Elon Musk's attempt at a bad joke about marijuana, because "420" has always been associated with pot. Tesla is a legendary cash-burner, with roughly $10 billion in debts and $2 billion in reserves, and Musk would probably need in the tens of billions of dollars to buy out shareholders at the right price.

But the board offered no further details of the proposal or its funding, sparking new questions about the feasibility of the master gambit Musk revealed in a surprise series of midday tweets on Tuesday.

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