Musk tweets he may take Tesla private and shares roar

Enlarge  Elon Musk

Enlarge Elon Musk

Tesla CEO Elon Musk says he is considering taking the electric auto maker private.

In keeping with his unorthodox style, Musk made the out-of-the blue announcement in a terse tweet. "Funding secured", Musk said on Twitter.

"It's not easy to take a company that's losing money private", Galloway said.

The tweets came after a report in the Financial Times that Saudi Arabia's sovereign wealth fund had taken a 3%-5% stake in Tesla, a holding worth at least $1.9bn.

Tesla did not respond to a request for comment immediately.

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Typically, buyouts like this involve a new investor buying out smaller shareholders, since there are regulatory barriers to a privately held company having many small shareholders.

At US$420 per share, a deal would represent a 22.8 per cent premium to Tesla's closing price on Monday, making it one of the biggest go-private deals with a price tag of about US$72 billion. The figure even drew some jokes on Twitter about whether it was a pot reference, with 420 being a common slang term for marijuana.

"Funding secured", Musk said on Twitter.

He is also under intense pressure to prove he can deliver consistent production numbers for the Model 3 sedan, Tesla's lowest-priced model and the key to its plans to become a mass-market automaker, after a host of manufacturing challenges and concerns it was burning cash too quickly. Earlier this year, he caused a stir during a first quarter earnings call when he angrily cut off two analysts whose questions annoyed him.

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