Tesla CEO Elon Musk is gearing to lead a buyout of the electric car maker in a stunning move that will end the maverick company's eight-year history trading on the stock market.
In his typically unorthodox fashion,Musk announced the news on his Twitter account, which he has previously used as a platform for pranks and vitriol. And now, for a proposal to pull off one of the biggest buyouts in US history.
Musk got the ball rolling on Tuesday after the stock market had already been open more than three hours, with a tweet announcing that he had secured funding to buy all of Tesla's stock at $420 per share, with no further details.
At that price, the buyout would cost nearly $72 billion, based on Tesla’s outstanding stock as of 27 July. But it’s unlikely the deal would cost that much because Musk owns a roughly 20 percent stake in the Palo Alto, California, company.
Musk also said he intends to give Tesla's existing shareholders the option of retaining a stake in the company through a special fund, if they want.
"Am considering taking Tesla private at $420. Funding secured," Musk wrote in his first tweet, following up with "good morning" and a smiley emoji.
He later tweeted that the only uncertainty about completing the deal is whether he can gain shareholder approval.
The first tweet came hours after the Financial Times reported that Saudi Arabia's sovereign wealth fund had built a significant stake in Tesla Inc., but it was unclear if that was the funding Musk was referring to.
The Financial Times, citing unnamed people with direct knowledge of the matter said Saudi Arabia’s Public Investment Fund had built a stake of between 3 and 5 percent of Telsa’s shares.
Musk's announcement was initially met with widespread skepticism, with many people connecting the proposed price to ‘420’ being a common slang term for marijuana.
Musk also previously used his Twitter account to joke that Tesla was going bankrupt in an April Fool's Day tweet and his stability was called into question last month after he called a British diver who helped rescue children from a Thailand cave a pedophile. That baseless tweet was quickly deleted and Musk apologised to the diver.
The confusion caused by Musk's Tuesday announcement via Twitter also prompted regulators of the Nasdaq stock market to temporarily suspend trading in Tesla's stock. Although it's unusual for a CEO to make such a major announcement over social media, it does not appear to be improper.
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