Elon Musk says he's considering taking Tesla private

Elon Musk says he's considering taking Tesla private

His US$12b Tesla stake would presumably be rolled into the private enterprise. At $420 per share, a deal would be worth $72 billion overall.

Musk releases an official statement for the company.

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

When another person tweeted that going private "saves a lot of headaches", Musk replied, "Yes". That would make the electric carmaker more valuable than fellow vehicles producer BMW ($64 billion), as well as companies such as Starbucks ($70 billion) and CVS ($66 billion). Key to that plan is ramping up production of the Model 3, a $35,000 mass-market model that has run into production and quality issues. Musk has feuded publicly with regulators, critics, short sellers and reporters, and some analysts have suggested that less transparency would be welcomed by Musk.

The rally after Musk's tweet unleashed fresh pain for short-sellers in Tesla, the most shorted USA stock. He said in his letter to employees that he did not seek to expand his ownership.

The stock had climbed slightly earlier in the day after the Financial Times reported that Saudi Arabia has quietly built a big stake in Tesla.

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In subsequent tweets on Tuesday, Musk said that he hoped all current investors would stay with Tesla even if it went private, and that he would be willing to create a fund to allow it. He made no mention in his tweets or his letter of where the funding for a deal would come from.

In his blog post, Musk said he wants to give shareholders an option. "Funding secured", Musk said.

Musk has long voiced annoyance with the public markets, where the company is beholden to investors and must report quarterly on its losses. He apologized for the comments last week in Tesla's latest conference call, saying "there's no excuse for bad manners".

Harvey Pitt, a former SEC chairman, told CNBC on Tuesday that Musk's tweets "might constitute fraud if any of the facts he disclosed are not true" or if there was any indication that he had floated the proposal purely to boost the stock price.

Nasdaq stock exchange halted trading in Tesla shares around 2.08pm local time.

Short interest in Tesla on Monday stood at almost $12 billion, equivalent to 28 percent of its float, according to S3 Partners, a financial analytics firm. They are also shielded from the ups and downs of the stock market.

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