Elon Musk tweets he has funding to take Tesla private

Wednesday, 08 Aug, 2018

"Funding secured", Musk tweeted, following up with "good morning" and a smiley emoji. Others interpreted the tweet as a joke, in specific Musk's reference to "420": a popularized reference to the consumption of cannabis by the marijuana culture.

Tesla stock was halted for more than an hour and a half and resumed trading up 11 percent to $380.60 as of 3:49 p.m.in NY. This would enable you to still share in the growing value of the company that you have all worked so hard to build over time.

Elon now owns about 20 percent of Tesla and so he would need something like $50 billion in additional capital to fully privatize the company, along with a shareholder vote of "yes" to the move. Earlier in the day, the Financial Times reported that Saudi Arabia was taking a $2 billion stake in the electric automaker.

The disclosure initially raised questions whether the eccentric Musk was joking, but he then amplified on his plan in a subsequent tweet that said he meant to create a special fund that would allow all current Tesla shareholders to retain a stake in the vehicle maker if they want.

Musk has also clashed repeatedly with critics, especially investors who have taken short positions on the stock, meaning they benefit when the price falls. In a May earnings call, Tesla shares slipped after Musk derided "boring, bonehead" questions from analysts regarding the company's finances.

Tesla did not immediately respond to a request for confirmation or clarification.

But another substantial segment of investors are convinced Tesla is doomed to fail and are betting on the company's eventual demise by becoming "short sellers" of its stock.

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The Securities and Exchange Commission has declined to comment on the matter.

For current shareholders, Musk said he would institute a provision ensuring that their stock be converted into private shares, adding he would 'ensure their prosperity in any scenario'.

The company said last week that it had burned more than $700 million in cash during the second quarter but made roughly $4 billion in revenue amid increased production of its new Model 3 sedan.

Musk is leaving it to shareholders to decide if they want Tesla to privatize.

Musk's approach to a possible go-private transaction also went against the grain of many companies that release major news in non-trading hours.

Elon is right - going private would certainly reduce distractions surrounding the company's day-to-day activities, even if some of those concerns are valid. In 2013, he emailed SpaceX employees that he was "hesitant to foist being public" on the company "given the long term nature of our mission".