Here's why Elon Musk wants Tesla to go private

Flags fly over the Tesla Inc. Gigafactory 2 which is also known as RiverBend a joint venture with Panasonic to produce solar panels and roof tiles in Buffalo New York

Flags fly over the Tesla Inc. Gigafactory 2 which is also known as RiverBend a joint venture with Panasonic to produce solar panels and roof tiles in Buffalo New York

Tesla shares sank slightly in trading Wednesday as some Wall Street firms expressed skepticism about CEO Elon Musk's push to take the electric vehicle maker private.

Since Musk hasn't provided any evidence or details about the funding, a number of people are skeptical about his claim.

The statement, issued by six of Tesla's nine-member board, suggests Musk's controversial tweets, which led to the company's stock being suspended from trading for a time on Tuesday, were less spontaneous than originally believed and not designed simply to punish Tesla stock short-sellers.

Tesla CEO Elon Musk tweeted Tuesday that he's is mulling taking Tesla private at US$420 a share.

Tesla released a statement Tuesday, which was emailed to employees hours earlier, laying out how and why the automaker would go private.

Public companies have four days to report certain material events that shareholders should know about to the US Securities and Exchange Commission. "And if you stay as a shareholder you get less information than before and you depend more and more on Elon Musk". Board members met several times and also addressed funding for the move, according to the statement.

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The Times article went on to mention that, if Musk has not in fact fully secured the funding, the assertion of which sent shares up, it would amount to securities fraud.

If we turn to the Street in general, we can see that Wall Street has a neutral point of view on Tesla, with TipRanks analytics exhibiting TSLA as a Hold. However, Musk expects the shareholders to agree with him and allow him to take the company private again. In the message, Musk said the move was "the best path forward" and would protect Tesla from making decisions based on market pressure rather than its long-term best interests. That report had already partly lifted Tesla's stock.

The company is still working its way out of what Mr Musk called "production hell" at its home factory in California, where a series of manufacturing challenges delayed the ramp-up of production of its new Model 3 sedan, on which the company's profitability rests.

Net net, Rusch reiterates an Outperform rating on Tesla shares, with a price target of $385, which represents a slight upside potential from current levels. Bloomberg News, which first reported on that meeting, said the talks failed to progress due to disagreements over ownership.

Names excluded from the board statement were Musk; his brother, Kimbal Musk; and Steve Jurvetson, a venture capitalist and early Tesla backer who's been on leave since a year ago.

Musk also wants Tesla's employees to remain shareholders.

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