Musk looking to privatise Tesla

Some nimble traders in Tesla Inc's options made massive paper profits on Tuesday, while short-sellers were hit with about $1.3 billion in paper losses after Tesla Chief Executive Elon Musk tweeted he was considering taking the company private at $420 a share.

Tesla's shares were up 6.5pc at $363.46.

"Being public means that there are large numbers of people who have the incentive to attack the company", he wrote.

However, he concedes Musk has good reason to take Tesla off the public markets, and he's established precedent through SpaceX and The Boring Company.

A leveraged buyout of Tesla, which went public in 2010 on Nasdaq and which sports a market capitalization of almost $64 billion, or other take-private transaction would represent an abrupt change in financial strategy. It also closely follows an announcement that Saudi Arabia's sovereign wealth fund has taken a 3 to 5 percent stake worth $2 billion in the company.

Mr Musk's statement came at a time when the electric auto maker faces financial constraints, and barely a week after the company announced it had made its biggest net loss to date of $717.5m (£547.6m) during the second quarter ending in June.

Musk's target for taking the company private would value it at more than $82 billion, according to Bloomberg. With approximately 170 million outstanding shares, Musk's proposed privatization of the company at $420 per share would require $71.4 billion, about a 17 percent increase.

Despite the fact that publicly-available FEC documents prove his donations to the PAC, Musk tweeted on Saturday that "reports that I am a top donor of the GOP are categorically false".

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Shares were pummeled in May after Musk abruptly cut off questions from Wall Street analysts over Tesla's spending plans.

Tesla has had more than its share of ups and downs over the past few months, due to an intense focus on production rates and sales figures for Tesla's mass-market Model 3 electric vehicle. Employees would remain shareholders, and Tesla would be independent of Musk's other company, Space X, though the structures would be similar. He says the move could be structured so that so that all shareholders will have a choice to remain investors in the private company or sell their stock for $420 (£324.58 / €362.11) per share. I think he's serious.

A spokesman for Tesla did not immediately return a request for comment.

As the matter unfolds, some are questioning whether or not the tweets are authentic.

"Given his historic frustration with short sellers, analysts and certain parts of the press, it is perhaps also not surprising that he has given consideration to taking the company private".

Tesla shares jumped more than 7 per cent to $US367.25 ($A494.94) before halting for news pending.

Vanessa Coleman

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