Elon Musk announced on Tuesday that he is considering taking the company private, as he loathes having to constantly answer to investors.
In fact, Elon Musk even tweeted that he had secured funding to make it go private “at $420.” Although nothing has been confirmed, investors are still shaking at the thought of Tesla not being publicly traded anymore. Musk explained to employees,
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…I fundamentally believe that we are at our best when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we’re all trying to achieve.
If he follows through with the plan, shareholders will be bought out for $420 a share, which is significantly higher than its current valuation of roughly $379. In fact, Tesla’s stock has risen 11 percent since the announcement.
Additionally, this news came after a report that the Saudi Arabian Public Investment Fund had acquired a stake in Tesla. Musk notes that Dell pursued a similar strategy and went private after facing pressure from investors.
Musk has been known to make heavy claims, so it will be interesting to see if he follows up with this. It could certainly change the trajectory of the company – whether that’s good or bad, the public will just have to find out.
Featured image via Flickr/Jakob Harter