In a subsequent blog posted on Tesla's website, Musk said that while no final decision had been made, "the reason for doing this is all about creating the environment for Tesla to operate best". They closed at $379.57 - up 11 percent, but far from the $420 price Musk was dangling. 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.
The Silicon Valley company faces a make-or-break moment in its eight-year history as a public company as competition from European automakers is poised to intensify with new electric vehicles from Audi and Jaguar, with more rivals to follow suit next year. According to MarketWatch, a buyout to make Tesla a private company would be the largest in history, costing $72 billion excluding debt.
Musk amplified this point on Tuesday, saying on Twitter that going private "will be way smoother", end "negative propaganda from shorts" and benefit shareholders.
Shares have rallied strongly since those earnings, but Musk has continued to show a short fuse towards critics, lambasting "short" sellers of Tesla shares - those who take bets that the stock will fall in value. He said in his letter to employees he did not seek to expand his ownership. But he says any deal would be structured so that shareholders could opt to remain investors or be bought out at $420 per share.
Musk has said he expects to continue being the CEO of Tesla after the deal goes through and that he doesn't expect any single shareholder to wind up with a majority of Tesla shares-suggesting that he has either assembled a consortium of investors to participate in the buyout or that some of Tesla's major shareholders-in addition to Musk-are planning to hold on to their shares.
Greentech Media senior analyst Allison Mond gave her view on Tesla going private, with a careful eye to its solar business.
"Earlier today, I announced that I'm considering taking Tesla private at a price of $420/share".
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. 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. On Sunday, he Tweeted a link to a parody of a movie about Adolf Hitler aimed at short-sellers, writing, "Dang, turns out even Hitler was shorting Tesla stock". Mr Musk's offer is 9 per cent higher than Tesla's peak closing price of $US385 reached almost a year ago.
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". "Funding secured." Trading in the stock was halted shortly afterward with the shares up 7 percent at $367.25.