Tesla’s Big Question: Better or Worse Off as Private Company

Tesla’s Big Question: Better or Worse Off as Private Company

Tesla’s Big Question: Better or Worse Off as Private Company

Musk has 22.3 million followers on Twitter, and Tesla's share price was already rising after the Financial Times reported that Saudi Arabia's sovereign wealth fund had taken a $2bn stake in the company.

Tesla stock, which has been on the rise for days, skyrocketed after the tweet and ended Tuesday up 11%.

Last week, Tesla said in its second-quarter update it will generate positive profits and cash flow going forward absent a severe economic downturn. "Funding secured", the message from Musk, sent out nonchalantly on Tuesday afternoon, stated.

After Musk made the tweet, trading of Tesla shares was temporarily halted as an official announcement was expected to follow shortly thereafter.

Tesla's board has confirmed that it will consider the proposal by chief executive Elon Musk to take it private.

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.

"Just because" Musk wants it at $420 "doesn't mean that there aren't other people who might be willing to come in with another transaction that would be more beneficial to shareholders", Pitt said.

The brief statement by six of the nine board directors said that the discussions about taking the company private had also "addressed the funding for this to occur".

On Wednesday, Breitbart News' Economics and Finance editor John Carney expressed doubts about plans to take Tesla private, suggesting the move may face insurmountable legal headwinds.

The Wall Street Journal reported Wednesday that SEC investigators could be looking into a variety of violations such as artificially raising the automaker's value via the Tweet and failure to disclose the source of funding to shareholders.

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.

Buying Tesla in its entirety would cost US$72b, based on the company's outstanding stock as of July 27.

He said that would allow Tesla to "operate at its best, free from as much distraction and short-term thinking as possible".

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.

Tesla is now valued at $63.8 billion.

He's also Tesla's largest shareholder.

Musk, his brother Kimbal and director Steve Jurvetson were not included in the statement from members Brad Buss, Robyn Denholm, Ira Ehrenpreis, Antonio Gracias, Linda Johnson Rice, and James Murdoch.

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