Elon Musk suggests taking Tesla private, shares surge

Elon Musk is considering taking Tesla Inc private, the electric car maker’s chief executive tweeted on Tuesday.

“Am considering taking Tesla private at $420. Funding secured,” Musk said.

At $420 per share, a deal would represent a 22.8 per cent premium to Tesla’s closing price on Monday, making it one of the biggest go-private deals with a price tag of about $72 billion.

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Tesla’s shares were up 6.5 per cent at $363.46. The company had a market value of $58 billion as of Monday’s close. Musk owns nearly 20 per cent of the company.

Separately, Financial Times reported on Tuesday Saudi Arabia’s sovereign wealth fund, overseen by Crown Prince Mohammed bin Salman, has built an undisclosed stake of between 3 and 5 per cent stake in Tesla.

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“I believe Tesla considers Tweets as public disclosure. I think he’s serious. Plus this is short squeeze rocket fuel after a nice quarter,” said analyst Chaim Siegel from Elazar Advisors.

While Musk is known for making erratic tweets, he tweeted “420” in a reply to Fox Business anchor Liz Claman, following up on his initial tweet. The company did not immediately respond to request for comment.

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“If true, this would be an incredible and surprising development. We still would see risk to completion of such a deal,” said CFRA analyst Efraim Levy.

He is also under intense pressure to prove he can deliver consistent production numbers for the Model 3 sedan, Tesla’s lowest-priced model and the key to its plans to become a mass-market automaker, after a host of manufacturing challenges and concerns it was burning cash too quickly.

© 2018 Reuters

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