The Strategist

Elon Musk is pondering sale and delisting of Tesla

08/08/2018 - 09:46

Head of Tesla Inc. Elon Musk said that he is considering selling the company to private investors.

Mohammed Abdelzak via flickr
Mohammed Abdelzak via flickr
He stated this in a Twitter message, noting that he thinks of selling the company to private investors at a price of $ 420 per share. At the same time, he hinted that he has already received an offer to buy the company. According to him, he also "hopes that at the same time all current investors of Tesla will remain with the company."

The given statement spurred 8% growth of Tesla’s shares at Nasdaq. The numbers announced by Mask are significantly higher than the current price levels of the company at $ 365 per share. Given Tesla's current debt, the value of the company in the event of its sale to private investors at a price of $ 420 per share will amount to approximately $ 82 billion.

On the same day, the Financial Times reported that the State Investment Fund of Saudi Arabia is going to purchase a stake of 3% to 5% in Tesla. 

Tesla Inc held an IPO in 2010, placing 13.3 million shares in the initial offering at a price of $ 17 per share. In September 2017, the company's quotes reached historic highs, trading at $ 389.57 within one of intraday sessions.

Previously, there were rumors that Musk pondered delisting of Tesla and selling the company to private investors. He said this in an interview with Rolling Stone in November 2017. Then he noted that the company could be "more effective" in the hands of private investors.

One of the potential reasons for selling Tesla may be Elon Musk’s desire to minimize external pressure on the company. Now Tesla is under close scrutiny by various analysts and participants in the stock markets.

In case of delisting of shares Tesla will not have to publicly report to investors, reveal its financial indicators and discuss the company's further strategy. One of the recent scandals around Tesla, for which Musk had to personally apologize, was related to his behavior before participants of the investors conference.


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