Elon Musk says taking Tesla private is 'best path forward'

Elon Musk

Elon Musk

The stock was halted at $366.94 per share. "Funding secured", the account reads.

The Silicon Valley company faces a make-or-break moment in its eight-year history as a public company as competition from European automakers is poised to intensify with new electric vehicles from Audi and Jaguar, with more rivals to follow suit next year.

He shared more details in a series of Twitter replies, noting that should Tesla go private, he'd remain in his role as founder and CEO of Tesla.

Gene Munster of Loup Ventures, said Tuesday that Musk's tweet could fall within the guidelines of the SEC as long as investors have been alerted. However, given Musk's lack of concern for industry norms and his ongoing feud with short-sellers, it's not out of the realm of possibility.

In the past year alone, Tesla shares have seen a wild swing, trading as low as $244.59 last April to reaching its all-time high less than six months later amid upbeat Model 3 sentiment. The company did not immediately respond to request for comment.

"Tesla's volatility makes it more of a trading stock than a value play", said Ihor Dusaniwsky, head of research at S3 in NY.

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Musk's other companies specializing in private spaceflight and underground supertrains - SpaceX and The Boring Company - remain private, and Musk has shown reluctance about opening them to the public markets. Musk, 47, has already pledged some of his shares of Tesla's common stock to secure bank borrowings, according to a June 2018 filing.

Shares in Tesla opened at $343.84 before hitting a high of $371.15 around mid-day on the news.

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. But Musk said he'd look for a way to allow current Tesla shareholders to continue holding Tesla stock.

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.

The tweet "might constitute fraud if any of the facts he disclosed are not true", Pitt said on CNBC.

The surprise announcements prompted former Securities and Exchange Commission Chairman Harvey Pitt to question whether Musk had broken securities laws. They are also shielded from the ups and downs of the stock market.

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