Here's why Elon Musk wants Tesla to go private

Elon Musk considers taking Tesla private as stock jumps

A Tesla sales center in Costa Mesa California

The stock was halted at $367 a share shortly after 2 p.m. (ET), as some grew concerned that Musk's tweets were an attempt at market manipulation. Musk did not disclose the source of the funding.

At $420 a share, a buyout of Tesla would cost about $71 billion.

Second, my intention is for all Tesla employees to remain shareholders of the company, just as is the case at SpaceX.

When asked on Twitter whether he was serious, Musk replied: "Yes". Musk has feuded publicly with regulators, critics, short sellers and reporters, and some analysts have suggested that less transparency would be welcomed by Musk. "Either they can stay investors in a private Tesla or they can be bought out at $420 per share, which is a 20 percent premium over the stock price following our Q2 earnings call".

Tesla shares, which were already rising on news of the Gulf investor, spiked in response.

Tesla posted a new blog to its site, essentially a copy-and-paste of an email Musk sent to Tesla's employees regarding taking the company private again. He apologized for the comments last week in Tesla's latest conference call, saying "there's no excuse for bad manners".

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"Tesla's volatility makes it more of a trading stock than a value play", said Ihor Dusaniwsky, head of research at S3 in NY.

It's unclear from where Musk has secured funding. He said wild swings in the stock price are a "major distraction" to workers and that being public "puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term".

"The 16% premium to current share price may not be high enough to incentivize existing shareholders to support the sale", Munster wrote in a note.

He also said that he would hold on to his almost 20% stake in the company if it were taken private, and that he wouldn't expect himself or any other investor to have a controlling vote after the buyout.

In his tweets, Musk said he would keep his Tesla shares no matter what happens, and noted that he now doesn't hold a controlling interest in the company. They were initially driven higher after the Financial Times reported Saudi Arabia has quietly built a big stake in Tesla.

Munster also said he did not see legal risk from Musk's tweets due to the Reed Hastings Rule, an SEC guideline announced in 2013 that said it was OK for companies to reveal key information on social media as long as investors have been alerted.

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