Elon Musk looking to take Tesla private at $420/share

Business / Tech
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Musk states that he is not looking to accumulate more control over and above the 20% stake he currently owns in Tesla.

Image courtesy JD Lasica

What started out as a tweet earlier today from Elon Musk has resulted in the posting of an email Musk sent to Tesla employees about taking the company private.

Of course, at the time if the tweet, the $420/share price was inferred as there’s not much else it could be in reference to. The blog post on the Tesla website by Musk confirmed this.

“Earlier today, I announced that I’m considering taking Tesla private at a price of $420/share,” wrote Musk.

Musk was quick to point out that the decision isn’t final as of yet but his reasoning for contemplating the move is “about creating the environment for the company to operate best.” There’s no doubt that the visionary CEO has been under fire lately from shareholders for a number of reasons. In fact, a shareholder even put forth a motion recently to have Musk replaced as CEO.

Musk, also involved with SpaceX and The Boring Company, two equally ambitious projects, states three reasons in support of the move.

“First, I would like to structure this so that all shareholders have a choice. Either they can stay investors in a private Tesla or they can be bought out at $420 per share, which is a 20% premium over the stock price following our Q2 earnings call (which had already increased by 16%). My hope is for all shareholders to remain, but if they prefer to be bought out, then this would enable that to happen at a nice premium.

“Second, my intention is for all Tesla employees to remain shareholders of the company, just as is the case at SpaceX. If we were to go private, employees would still be able to periodically sell their shares and exercise their options. This would enable you to still share in the growing value of the company that you have all worked so hard to build over time.

“Third, the intention is not to merge SpaceX and Tesla. They would continue to have separate ownership and governance structures. However, the structure envisioned for Tesla is similar in many ways to the SpaceX structure: external shareholders and employee shareholders have an opportunity to sell or buy approximately every six months.”

Musk finishes off by stating that he is not looking to accumulate more control over and above the 20% stake he currently owns in Tesla. Instead, he reiterates his intent to have the company operating “at its best” and hopes a shareholder vote will support his vision.

What do you think about Elon Musk’s desire to take Tesla private? Let us know in the comments below or on Google+, Twitter, or Facebook.

  Source: Tesla
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