Elon Musk is in the news again over some tweets on Twitter. But thankfully, it not due to backlash from an abrasive one. Rather, Musk’s latest tweets have industry and financial analysts in another frenzy, openly expressing the idea of transitioning Tesla Motors into a private company, prospectively starting stock share prices at $420 per share.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
Citing updates from his own Twitter page, Musk has countless analysts and outlets trying to make sense of it all. Though to try and calm the storm, Musk reaffirmed on Twitter that it could potentially be the best move for the company at the moment. The idea is that making Tesla into a private company would lift the burden of “pressure from Wall Street expectations,” in his words.
But ultimately, Musk also emphasized that there has not been a final decision.
Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote. https://t.co/bIH4Td5fED
— Elon Musk (@elonmusk) August 7, 2018
Recently, Musk published a letter to his employees about the prospect on Tesla’s company blog, to which he says: “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.”
Such a prospect has the industry in a frenzy for one of the most highly trending companies in the world as it’s seen as an unusual and unprecedented move from Musk.
If the decision to make Tesla private also went through, it would be one of the largest transactions in history because of the initial starting price of the stock at $420 per share. That is roughly 11 percent more than the company’s current trading price, at around $380 per share as of this writing. And even then, that $380 per share represents one of Tesla’s all-time highs.
And ultimately, the deal would be worth more than $80 billion, including Tesla’s debt.
Part of the frenzy also stems from agitation caused by “short-sellers,” or people who have ultimately been using the stock market to manipulatively bet against Tesla Motors, threatening any confidence stock market investors might have in the company. With Musk announcing the possibility of making Tesla private, that agitated short-sellers even more by threatening them with big losses.
Musk’s tweets also caused Tesla’s share prices to surge before trading stopped.
Right now, Tesla Motors’ future and trajectory are all currently up in the air as the company continues to face major challenges, stemming from production difficulties with the Model 3 and resulting financial turmoil from dwindling confidence from investors. As a result, market analysts are watching like a pack of vultures to see where Musk leads the company. Either way, the frenzy is far from over and analysts won’t be resting anytime soon, given Musk’s unpredictable nature to tweet messages with questionable seriousness.
