Elon Musk has confirmed that he wants to take Tesla private.
In classic Musk form, he had earlier tweeted that an offer of US$420 per share was in the works. It would be more conventional for such an announcement to be published through an official filing. He confirmed the offer later in the day in a company statement.
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Musk said finance for the deal, at a 20% premium on Tuesday’s opening prices, was already in place, without giving further details. Stocks were up around 10% at the time of writing.
Any deal to take the company private would have to secure shareholder approval.
In a letter to employees, Musk called the firm’s share price a distraction.
“First, a final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best. As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders. Being public also 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. Finally, 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.”
The Tesla board issued a release on Wednesday confirming the news. A statement on behalf of Brad Buss, Robyn Denholm, Ira Ehrenpreis, Antonio Gracias, Linda Johnson Rice, and James Murdoch read:
“Last week, Elon opened a discussion with the board about taking the company private. This included discussion as to how being private could better serve Tesla’s long-term interests, and also addressed the funding for this to occur. The board has met several times over the last week and is taking the appropriate next steps to evaluate this.”
The company’s manufacturing output has been heavily scrutinised and Musk has cut an increasingly frustrated figure during quarterly results calls deeming some analysts’ questions too boring.
