Tesla boss Musk considering taking firm private

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Tesla's stock spiked Tuesday after Musk made the abrupt announcement in a terse tweet.

In his tweets, Musk said he would keep his Tesla shares no matter what happens, and noted that he now doesn't hold a controlling interest in the company.

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

The CEO wrote in a letter to employees Tuesday, revealing that he is genuinely considering moving Tesla off the public stock markets.

Tesla's stock gained 16% on August 2 after its second-quarter earnings.

Since Tesla is also the most shorted stock in history, Musk said the company's doubters have incentive to bash the company and depress the company's share price. While Musk took an apologetic tone with analysts during Tesla's second-quarter call, it was only three months ago that he was calling questions "bonehead". Factoring in $US8.8 billion ($11.9 billion) in debt, Musk's ganja-friendly target price to go private would value the company at around $US80 billion ($107.8 billion).

He has been accused of spreading himself too thinly to steer Tesla to profitability in the competitive auto industry.

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. 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".

Musk's abrasive style has often been a source of friction with Wall Street. Whether he meant to do that or not, his tweet certainly had that effect: By the time trading halted, Tesla's market value had soared to $61.74 billion, a significant raise from its pre-tweet $58 billion.

"I can't believe this is something to bluff or make fun of", said George Galliers of Evercore ISI. He also said the quarterly financial requirements of being a public company "puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term".

When asked on Twitter whether he was serious, Musk replied: "Yes.It saves a lot of headaches". A spokesperson for the SEC declined to comment when reached by Gizmodo.

After Musk, the next largest shareholders in Tesla are the mutual fund giants T. Rowe Price and Fidelity, with stakes of more than 9% and 8%, respectively, according to Thomas Reuters Eikon.

His tweet came hours after the Financial Times reported that Saudi Arabia's sovereign wealth fund had bought a $2 billion stake in Tesla Inc., but it was unclear if that was the funding Musk was referring to.

Analysts took Musk at his word.

"Both longs and shorts are susceptible to wild price moves which can easily swing a trader's book from profit to loss in a single day, which may be the reason they are in the name in the first place", he said.

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