Yesterday evening, the shares of Tesla were suspended following a series of tweets that were posted by Elon Musk, the billionaire entrepreneur, in which he said that he was considering taking his firm, Tesla, private.
The shares of Tesla were last up by 7.4 percent at $367.25.
Musk said in a tweet: “Am considering taking Tesla private at $420. Funding secured.”
A former chairperson of the US Securities and Exchange Commission (SEC) was quoted by CNBC after he said that the disclosure of Musk on Twitter, while not new, was “highly unprecedented… and raises significant questions about what his intent was.”
There were people who claim that Musk may not have been serious in his posts. However, the billionaire investor seemed to support his words with follow-up tweets in which he stated: “I don’t have a controlling vote now & wouldn’t expect any shareholder to have one if we go private. I won’t be selling in either scenario.”
He also tried to reassure the investors of Tesstatingting: “My hope is *all* current investors remain with Tesla even if we’re private. Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelity’s SpaceX investment.”
Ross Gerber, the CEO of Gerber Kawasaki Wealth & Investment Management and one of the investors of Tesla, said that he had “no intention” of selling his shares at $420. On Twitter, he posted: “The stock is worth $570 a share based on 2019 revenue. No way Elon, I’m keeping my stock.”
The shares of Tesla were already feeling a boost after a report that was made by the Financial Times that the sovereign wealth fund of Saudi Arabia built a reported 3 to 5 percent stake in the company of Musk, in what has been regarded as the most recent bold attempt by Mohammed bin Salman, the crown prince, to modernise his Kingdom.
For some of the watchers, the news that Musk might take his company private may not come as a big surprise, given the often fraught relationship of the CEO with Wall Street.
He has frequently criticised Wall Street regarding its obsession with quarterly financials at the expense of long-term vision and growth. In 2010, Musk took Tesla public, however, he kept SpaceX – which has experienced its own troubles – private.
A Twitter user alluded to the decision of Dell, a computer company, to go private in 2013. He said that it “saved a lot of headaches”, to which Musk answered: “Yes.”
The long-term visions of Musk have seen Tesla through a promising but somehow rocky year, with the electric car firm reported a mixed bag of results last week. The revenue during the in the three months to the 30th of June was able to surpass expectations at $4 billion (£3.05 billion), however, its losses which amounted to $742 million, were steep as the electric car firm continued to burn through money.
Over the past year, Tesla has been under pressure to meet its targets, in what Musk has dubbed “production hell.” Last April, Tesla pressed the pause button on the assembly line of its Model 3 cars for a short period in order to “improve automation and systematically address bottlenecks in order to increase production rates.”