Elon Musk says taking Tesla private is 'best path'

Tesla CEO Elon

Musk, who has previously discussed possibly taking Tesla private, has had bumpy relations with Wall Street, often dismissing questions over financing. "Funding secured", Musk tweeted in early afternoon.

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.

Tesla shares ended the day at $379.57, within reach of their all-time high and more than 5 percent above the bonds' conversion price of $359.8676.

Asked on Twitter whether Musk would continue to be CEO under such a scenario, he replied there would be "no change".

The plan would need shareholder approval, but Musk's tweet sent Tesla stock spiking by nearly 9%. It burned through less cash ー $739.5 million in Q2 compared to $1 billion the quarter before ー and managed to increase production significantly of the mid-range Model 3 sedan.

Musk has been in a very public battle with these shorts for years.

The CEO said shareholders would have the final say if he decides to follow through on going private, and that he would stay in his job.

At that price, the buyout would cost almost $US72 billion, based on Tesla's outstanding stock as of July 27, but it is unlikely the deal would cost that much because Mr Musk owns a roughly 20 per cent stake in the Palo Alto, California, company. He said in his letter to employees that he did not seek to expand his ownership.

A $420 price, a number seemingly plucked from a frat boy stoner fantasy, is 22 percent over Monday's closing stock price and would be the biggest leveraged buyout in history -- with a value of about $82 billion counting debt. My hope is for all shareholders to remain, but if they prefer to be bought out, then this would enable that to happen at a nice premium.

Musk said all current shareholders would have the choice to remain as investors in the private company, and that employees would remain shareholders.

The goal, Musk added, was not to tighten his grip on Tesla. Netflix stock moved higher as a result.

What on earth is happening to Tesla stock today?

Tesla's stock spiked Tuesday after Musk made the abrupt announcement in a terse tweet.

Following the company's surge after last week's earnings, Musk took aim again at a short-seller in a reported short YouTube video that likened these investors to Hitler's last days.

He also said trading its stock publicly "means that there are large numbers of people who have the incentive to attack the company". The PIF is at the center of Saudi Arabia's efforts to diversify revenue away from oil under an economic transformation plan known as Vision 2030.

"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 vehicle.

Musk did not disclose the source of the funding.

Representatives for the Saudi fund weren't immediately available for comment on the investment, which the Financial Times first reported earlier Tuesday.

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

And Tesla also released an email to its employees in which Musk argued going private would release the company from "wild swings in our stock price that can be a major distraction for everyone working at Tesla".

Tesla shares rose 11 percent Tuesday, meaning short sellers lost about $1.3 billion in mark-to-market losses, according to estimates from Ihor Dusaniwsky, S3's head of predictive analytics.

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