Elon Musk’s Tesla going private a ‘win-win’ for everyone, investor says

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Musk's tweet came nearly simultaneously with a new report from the Financial Times that revealed for the first time that Saudi Arabia's Public Investment Fund has been quietly buying up about five per cent of the electric vehicle company over the last few months to the tune of $US2 billion ($2.7 billion).

Asked on Twitter whether Musk would continue to be CEO under such a scenario, he replied there would be "no change". As he explained "Being public ... subjects us to 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".

Despite its challenges, Tesla has remained a favourite among many investors, partly due to their faith in Musk, who made his initial fortune as a co-founder of PayPal and also is the CEO of a trail-blazing aerospace company, SpaceX, that's already private.

Musk is leaving it to shareholders to decide if they want Tesla to privatize. "I own about 20% of the company now, and I don't envision that being substantially different after any deal is completed". He said in his letter to employees that he did not seek to expand his ownership. The company had a market capitalization of over $60 billion, as of Tuesday afternoon. "The 16 percent premium to the current share price may not be high enough to incentivize existing shareholders to support the sale".

Musk has a history of making bold statements on Twitter and walking back from the precipice after more careful consideration, but the more detailed email to employees seems to add credence to his plan to go private.

"Going forward, we believe Tesla can achieve sustained quarterly profits, absent a severe force majeure or economic downturn, while continuing to grow at a rapid pace", the company said in its earnings report.

Since Tesla is also the most shorted stock in history, Musk said the company's doubters have incentive to bash the company and depress the company's share price.

The most obvious equity partners for Musk would be a sovereign wealth fund such as Saudi Arabia's Public Investment Fund (PIF) or major technology investment funds such as SoftBank Group Corp's Vision Fund, bankers said.

Musk was clear in his email that a final decision has not been made, and, come to think of it, it's not even clear if this move would be possible. Following the tweet, Tesla stock shot up to $367.25 before the stock's trading was halted at 2:08pm.

The U.S. Securities and Exchange Commission allows companies to use social media outlets like Facebook and Twitter to announce key information in compliance with its fair disclosure rules so long as investors have been alerted about which social media outlets will be used to disseminate such information.

Tesla closed on Tuesday at $379.57 per share. If Mr. Musk hasn't lined up the financing he claimed, he could be accused of trying to drive up Tesla's stock to make the company's many naysayers suffer.

"We're working on a new Tesla mini-car that can squeeze in an adult", Musk tweeted on Sunday, replying to a user who asked him about a "Model X Radio Flyer" toy auto.

BALLSY BUYOUT. But a buyout (acquiring a controlling interest in Tesla) would cost a spectacular $72 billion, according to the Wall Street Journal.

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