TESLA CEO Elon Musk has laid out his rational for possibly taking the company private, saying the move would free the electric car maker to focus on long-term goals, rather than the quarterly concerns of Wall Street.
Musk detailed his proposal in a blog post on the company’s website on Tuesday, hours after stunning the company’s followers by casually tweeting that he might take it private.
Musk complained that Tesla is “the most shorted stock in the history of the stock market” and many people “have the incentive to attack the company”.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
He said in the blog post that no final decision had been made, but said any deal would be structured so that shareholders could opt to remain investors or be bought out at $US420 per share (A$570).
It comes as shares in the company jumped following an earlier tweet by Musk that he was considering taking the electric automaker private.
Shares were up 5.9 per cent to $US361.87 ($A490) around 1pm EDT (3am AEST) after spiking to $US371.15 ($502) shortly after Musk’s tweet.
The stock since settled at $US366.94 before exchanges halted trading, pending an upcoming announcement from the company.
He said funding had been secured and that he would stay on as chief executive if the company went private.
Tesla did not immediately respond to a request for comment.
The gains added to upward movement on the stock after The Financial Times reported earlier that a Saudi Arabian sovereign wealth fund had built a stake of between three and five per cent in the company.
Musk’s tweet comes as Tesla faces continued pressure to ramp up output of the Model 3 sedan, its first effort at the middle market.
The company began hitting production targets last month after missing a series of earlier benchmarks.
Tesla shares have been on the upswing since it reported on August 1 a bigger-than-expected second-quarter but signalled that it expects to reach profitability in the third quarter and remain in the black for the foreseeable future.
Musk has cut a controversial figure on social media and beyond, apologising last month for calling British caver Vernon Unsworth, who helped rescue 12 Thai boys from a cave a “pedo,” short for paedophile, after Unsworth spoke dismissively of the Tesla chief’s proposal for bringing the boys to safety.
He has also had a prickly relationship with Wall Street, apologising last week to equity analysts from major banks after cutting them off abruptly during the previous earnings conference call.
Originally published as Musk tweets he may take Tesla private