If his plan works out like envisioned it, it would bring the value of the company up and also get rid of investors.
Tesla, American company is now after a year or two of uncertainties due to delays in production of Tesla Model 3, first global midsized sedan, is finally on the rise. Which means, Elon Musk, notorious CEO of the company has no ties around his neck from investors. Even though, other projects in the past few months gained some success, due to mentioned delays, Investors were already considering a possibility of searching a new executive manager.
From this point of view, we can thus understand his yesterday’s decision, or better yet, announcement of an attempt to take the company from the stock market and make it private. Tesla, being a public company, is a “subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders,” wrote Musk in public statement, sent to Tesla employees yesterday. “I fundamentally believe that we are at our best when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we’re all trying to achieve.”
Am considering taking Tesla private at $420. Funding secured.— Elon Musk (@elonmusk) August 7, 2018
He then announced his attempt for Tesla to go private in his usual manner, via Twitter, where he wrote, that he is “considering taking Tesla private at $420. Funding secured.” After the announcement, stocks of a company, that is worth around 60 billion dollars went up for around 7 percent, especially after speculations, that Saudi Arabia is planning to buy a significant amount of stocks.
Eventually, no deal around selling and buying Tesla stocks has been done yet. He then continued with words, that any such deal should also be approved by current shareholders. However, when Musk comes up with a plan as such, he usually takes it all the way. And if he would eventually have managed to sell company stocks with the price he has in mind, this would bring a total value of the company to around 70 billion dollars, 10 billion more than currently. And for Musk, that means 10 billion more reasons to do it.