Elon Musk stunned investors on Tuesday with a tweet saying he wants to turn Tesla into a private company. The outspoken entrepreneur took to Twitter to deliver the news. "Am considering taking Tesla private at $420. Funding secured," Musk tweeted in early afternoon trade. Tesla’s stock stopped trading for a bit post this shocker from Musk.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
Tesla published an email in the afternoon that confirmed Musk’s tweet. In the email that Musk sent to company employees, he said that no final decision on taking the company private had been made and that it would ultimately be left to shareholders but he is pushing for it.
"The reason for doing this is all about creating the environment for Tesla to operate best," Musk wrote. "As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders."
Being public "also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term," Musk said. "Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company."
Tesla Motors started selling its stock to the public in 2010 — the first initial public offering by a U.S. automaker in more than a half-century.
Musk said he will give shareholders a choice: either remain investors in a private Tesla, or sell their stock for $420 per share — a 20 percent premium over the price at the time of the company's recent quarterly earnings call.
"This has nothing to do with accumulating control for myself," Musk said in the Tuesday email. "I own about 20% of the company now, and I don't envision that being substantially different after any deal is completed."
Musk’s recent move comes after he has been heavily criticised for not being able to deliver on promises – such as producing 5,000 of Tesla's more affordable Model 3 cars per week.
Musk’s leadership has also come under question after Tesla reported a loss of more than $700 million for the first quarter this year. In fact, Tesla has turned a narrow profit in only two quarters since it became a public company in 2010. Musk has vowed that the company will start turning a regular profit in the second half of this year.