Taking Tesla private is ‘best path,’ says Elon Musk

Elon Musk

CEO Elon Musk stated on Tuesday he is thinking about taking Tesla Inc private in what would be the largest deal of its kind, moving the automaker out of the glare of Wall Street as it goes through a time of rapid growth under tight financial constraints.

“Am considering taking Tesla private at $420. Funding secured,” Musk wrote on Twitter. At $420 each share, a deal would be worth $72 billion overall.

In a letter to Tesla workers published over an hour later on the company’s blog, Musk described that going private would be “the best path forward.” Such a move – over which no firm decision had been made – would allow Tesla “operate at its best, free from as much distraction and short-term thinking as possible,” he added.

Tesla shares closed up 11 percent at $379.57, somewhat below their all-time high.

Asked on Twitter whether Musk would continue to be CEO under such circumstances, he answered there would be “no change.”

Musk has been under extra pressure this year to turn his money-losing, debt-laden company into a profitable higher-volume manufacturer, a prospect that has sent Tesla’s valuation higher compared to General Motors.

The company is still focusing on what Musk called “production hell” at its home factory in Fremont, California, where a range of manufacturing obstacles delayed the ramp-up of production of its new Model 3 sedan, on which the company’s profitability rests.

The Silicon Valley company faces a make-or-break moment in its eight-year history as a public company as rivalry from European automakers is poised to intensify with new electric vehicles from Audi and Jaguar, with more competitors to follow suit next year.

On other hand, Tesla has announced strategies to build a factory in Shanghai, China, and another in Europe, but information is scarce and funding unknown.

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