Featured Image for Elon Musk sends Tesla shares skyrocketing with a single tweet

Elon Musk sends Tesla shares skyrocketing with a single tweet

Elon Musk has rocked the financial world by announcing on Twitter that he is considering taking Tesla into private ownership once again.

Tesla operated thanks to various rounds of private investment – and a mammoth low-interest loan from the US Department of Energy – since its inception in 2003 until its initial public offering (IPO) in 2010, when 13,300,000 shares of common stock were issued to the general public at a price of US$17 per share.

Tesla shares were faring well before today, in part due to a report in the Financial Times that said that Saudi Arabia’s sovereign wealth fund had taken a 3-5% stake in the company.

But Musk provided an extra boost to the company’s stock with an unexpected tweet:

Those 61 characters seem to have helped, with Tesla shares closing on Tuesday at just below US$379.57 – about $4 dollars shy of its all-time high. The surge added US$1.4 billion to Musk’s fortune, Bloomberg reports.

“A final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best,” Musk explained further in a blog post addressed to employees and stockholders.

“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.

“Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term.”

Musk assured that all Tesla employees would remain company shareholders after the buyout, and would still be able to periodically sell their shares. He said he also hopes to continue as CEO.

If his plans do go ahead, and Tesla goes private at $420 a share like Musk announced, the buyout would become one of the largest transactions of its kind in history, a deal worth more than $80 billion, including debt.

All this financial commotion comes at a time when the company is still struggling to hit the production goals for their Model 3, and has yet to turn a profit.

About the author

Filmmaker. 3D artist. Procrastination guru. I spend most of my time doing VFX work for my upcoming film Servicios Públicos, a sci-fi dystopia about robots, overpopulated cities and tyrant states. @iampineros

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