Elon Musk confirms plan to make Tesla a private company

The chief executive of Tesla Motors has announced plans to take the company private again.

Elon Musk revealed the plans on Twitter in which he said shareholders could be bought out at $420 a share, around 20 percent higher than its current value.

In an email to employees, Mr Musk explained the decision as the “best way forward” for the company’s long-term mission, but that a final decision was yet to be made. Any move to delist the company is subject to a full shareholder vote.

“As a public company, we are subject to wild swings in our stock price that can be a major distraction,” he explained.

He also called attention to Tesla’s unenviable position as “the most shorted stock in the history of the stock market”, taking aim at those investors who look to financially profit from the company doing badly.

 

 

Some commentators speculated the decision was announced after the Financial Times revealed that Saudi Arabia has amassed a $2.9 billion stake in Tesla.

Musk co-founded the company in 2003 and it first went public in 2010. At the time, shares were sold at $17 apiece.

Since then its stock has soared, albeit with many ups and downs along the way. As a result of the announcement, its share price jumped 11 percent to its highest price for the year, ending the day at $379.57.

Tesla has done more than most to grow and commercialise electric vehicles, and Musk has remained adamant about the company’s mission to fight climate change.

On announcing a deep round of redundancies earlier this year, he wrote to employees that “profit is obviously not what motivates us”.

“What drives us is our mission to accelerate the world’s transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable.”

 

Photo Credit: OnInnovation/Flickr