Elon Musk tweets he may take Tesla private

Elon Musk

Musk is Tesla's largest shareholder, with an approximately 20 percent stake valued at about $12 billion, according to S&P Capital IQ.

At US$420 per share, a deal would be worth US$72 billion (S$98 billion) overall.

In his typically unorthodox fashion, the eccentric Mr Musk dropped his bombshell on his Twitter account, which he has used as a platform for pranks, vitriol and now for a proposal to pull off one of the biggest buyouts in United States history.

Tesla boss Elon Musk has suggested via Twitter that he is "considering" taking the electric vehicle firm private.

Musk, who has depicted the quest to build up no-emissions electric cars as an environmental mission, said he viewed going public as "the best path forward", but that a final decision had not been made and ultimately rested on shareholder support.

"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", Musk wrote.

Trading in Tesla shares was halted on Tuesday, after a tweet by chief executive Elon Musk sent shares soaring by more than 7%.

Dusaniwsky said the cumulative mark-to-market paper loss for Tesla short sellers is about $3 billion this year and 35 million shares are held short. "His credibility has come into question over a number of things".

The stock was halted at $366.94 per share.

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Tesla Motors started selling its stock to the public in 2010 - the first initial public offering of a US automaker in more than a half-century.

How does Saudi Arabia fit into all this?

The SEC declined to comment on Tesla, but the regulator has previously declined to sanction Netflix CEO Reed Hastings in 2013 for revealing important company information on Facebook.

Officially, the SEC is fine with financial announcements on social media as long as investors are alerted to which platform they should be keeping an eye on and that no investors are given an advantage to receive the information first.

Elon now owns about 20 percent of Tesla and so he would need something like $50 billion in additional capital to fully privatize the company, along with a shareholder vote of "yes" to the move. Shares could be bought or sold periodically on a private marketplace, Musk said. "Being public definitely increases the management overhead for any given enterprise".

Munster notes that Musk's other companies, SpaceX and The Boring Company, are private firms. "His missions are big and make it hard to accommodate investors quarterly expectations".

Tesla doesn't meet the typical profile of a company that can raise tens of billions of dollars of debt.

Musk and his luxury automaker have been under vast pressure to overcome repeated delays and deliver on promises of producing 5,000 of Tesla's more affordable Model 3 cars per week. "The use of the specific price for a potential going private transaction is highly unprecedented".

Joel Levington, an analyst at Bloomberg Intelligence notes, "Funding $50 billion plus for a negative free cash flow business would be hard, if not extraordinary".

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