As Tesla investors were catching up on the report of Saudi Arabia’s significant stakes in Tesla, Elon Musk tweet stating his plans to take Tesla private came as a bombshell. His twitter post simply stated that he is considering taking the company private and slated the same at a price of $420, while the funding has been already secured by the company.

CEO of electric car maker declared his surprise buyout plans for Tesla, with funds assured, on 7 August 2018. The announcement came via personal Twitter account of Elon Musk at around 12:48 pm Eastern Time. His audacious offer over social media moved investors to check with the authenticity of the post. However, gaining clarity on Musk’s intentions, Tesla shares soar 11% to close at $379.57, building to the positive market sentiments on Saudi deal in a single day.

Tesla went public in 2010 with its initial public offering of $17 a share. That means alongside innovative automaker’s progress Musk’s offer of share price $420 proposes to give circa 24 times return to the money invested initially in Tesla.

Post Musk’s tweet, Tesla broke silence by publishing an official statement from Mr. Musk to employees that said, “As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders”.

Although confirming that the deal has yet not been finalized, Mr. Musk indicated the readiness of the funds to buyout $63.47 billion worth Tesla at $420 a share which is 20% greater than the stock price recorded after the company’s second-quarter earnings last week.

He also elucidated, his buyout plan has nothing to do with accumulating control for himself above 20% of his current shareholdings. He cited Tesla is at its best but being a public company it is getting harmed by the wild swings in the share price along with short sellers’ betting attacks.

Mr. Musk’s freewheeling behavior in running a public company has been greatly criticized by investment bankers and corporate governance. By giving no details on what basis the offer of $420 a share has been calculated, and how much fund had been secured and from whom, Musk cryptic statement is advocated to come under analysis.

As per the Securities and Exchange Commission ruling…

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