Elon Musk’s tweets about taking Tesla private shake up its share prices

Elon Musk’s tweets about taking Tesla private shake up its share prices

That came after Musk voiced similar thoughts on Twitter merely an hour earlier, writing: "Am considering taking Tesla private at $420".

Several financial industry insiders were unclear why trading was halted, whether it's because Musk is trying to initiate a buyout or because he could be violating FCC regulations.

Bullish on the performance and increased production of "Model 3" cars, Tesla CEO Elon Musk is now planning to introduce a mini-car.

At $420 per share, it would cost about $71 billion to take Tesla private.

Tesla shares have been on the upswing since it reported on August 1 a bigger-than-expected second-quarter but signalled that it expects to reach profitability in the third quarter and remain in the black for the foreseeable future.

"Being forced to sell at $420 in a go-private deal would be a little bit of a bummer because, although myself and all the other Tesla investors would make money at an all-time high, we'd be missing out on a long-term ride", Russell said.

The most obvious equity partners for Musk would be a sovereign wealth fund such as Saudi Arabia's Public Investment Fund (PIF) or major technology investment funds such as SoftBank Group Corp's Vision Fund, bankers said.

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

While Mr Musk has previously discussed the drawbacks of being a public company, he has also used his Twitter account in ways that surprised investors.

Tesla didn't immediately respond to a request for comment.

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Elon Musk's suggestion on Tuesday that he would like to take Tesla Inc private may provide something the electric vehicle maker needs: a little debt relief.

Palo Alto-based Tesla, named after the physicist Nikola Tesla, went public in 2010.

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

The 11 percent jump in Tesla's stock price following Musk's public musings on possibly buying the company from existing shareholders drove $2.3 billion of convertible debt past the level at which investors can swap them for stock at a profit.

The number of shares borrowed to sell the stock short stands at 33.8 million shares, according to data compiled by IHS Markit, meaning that Musk's tweet alone sent a $US783 million shock through the bear patch.

For current shareholders, Musk said he would institute a provision ensuring that their stock be converted into private shares, adding he would 'ensure their prosperity in any scenario'.

Around 3:30 ET, Tesla released a statement via its blog, titled "Taking Tesla Private". Before Musk's tweet, Tesla had a market value of $58 billion, already higher than that of General Motors or Ford, even though those companies are significantly larger and more profitable.

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.

His asking price of $420 would be 22 percent of Monday's closing share price, and almost 9 percent above the stock's all-time closing high of $385.

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