Elon Musk considers taking Tesla private at over $70 billion, he says he has the money

Elon Musk has often complained about Tesla being a public company, which brings too much focus on quarterly results over long-term goals, according to the CEO.

Now he says that he is considering taking the automaker private at a value of over $70 billion and he already has the money secured.

Musk took Tesla public back in 2010, but he maintained his other company, SpaceX, private, which offered him a great comparison point.

The CEO has often bumped heads with Wall Street over how they perceive Tesla and its potential because he thinks the financial industry is too focused on short-term quarterly results over the long-term potential of the company.

He has reportedly considered bringing the company private again in the past – including through a potential partnership with Google back in 2013, but it never happened.

Now Musk tweeted that he is considering bringing the company private at $420 per share and that he already has the money secured:

Am considering taking Tesla private at $420. Funding secured.

— Elon Musk (@elonmusk) August 7, 2018

At $420 per share, it would be a move worth over $70 billion with the current number of outstanding shares – though Musk already holds over 20% of the outstanding share, which would reduce the money needed to secure the transaction.

He would also need the support of other major shareholders, but the CEO has historically often been able to get shareholders behind him, most recently with the SolarCity acquisition.

Interestingly, Musk’s comment came right after a report that Saudi Arabia’s sovereign wealth fund has been building up a significant stake in Tesla worth between 3 and 5 percent of the company, according to Financial Times (paywall).

Last year, Chinese holding firm Tencent also acquired a total 5% stake in Tesla.

Update: Musk confirmed that he wouldn’t sell his shares in a scenario where the company goes back to being private:

I don’t have a controlling vote now & wouldn’t expect any shareholder to have one if we go private. I won’t be selling in either scenario.

— Elon Musk (@elonmusk) August 7, 2018

Update 2: Musk confirmed that current shareholders will be able to retain their shares:

My hope is *all* current investors remain with Tesla even if we’re private. Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelity’s SpaceX investment.

— Elon Musk (@elonmusk) August 7, 2018

Update 3: Musk also confirmed that he plans to remain CEO:

No change

— Elon Musk (@elonmusk) August 7, 2018

Update 4: the market has, of course, reacted positively to Musk’s claimed that a $420 buyout is possible, but TSLA trading has now been halted by NASDAQ for a reason still unknown.

Update 5: Trading on TSLA has resumed and the stock is up 10% at the time of writing. Elon Musk has also elaborated on plans for Tesla to go private in email to employees: says structure would be much like SpaceX.

Electrek’s Take

That would be a giant move from Tesla and if Musk says that he has the funding secured, I have to think that he has been talking to some companies to partner in order to bring Tesla private.

We have heard about Musk discussing the possibility with Google before and we know that Musk is friends with Google co-founder Larry Page.

In the past, Tesla has also partnered with other automakers, specifically Daimler and Toyota, and that was when Tesla was private.

They have since divested from their stake in Tesla since the company went public.

It looks like Musk is very confident that Tesla is going to be profitable this quarter and that they are going to be able to manage with their operating income.

Tesla got what it needed from the public market, which bankrolled Tesla for the past 8 years, but if shareholders get a buyout at $420, they can’t be mad about it.

Who do you think is willing to pay $420 per share for Tesla? Google? Apple? An automaker? Let us know in the comment section below.

Update: Musk has since confirmed that he doesn’t expect any shareholder to have voting control of the company if his deal to go private goes ahead and he would retain his shares.