The unusual step taken Tuesday afternoon came shortly after Mr. Musk dropped a bombshell on Twitter by announcing he had lined up the financing to buy all of Tesla’s stock at 420/share. That would cost about $70-B, making it one of the biggest buyouts in US history for a company deep in the Red with few prospects of ever coming out of it.
The disclosure has raised questions whether the very eccentric Musk was joking, but he then amplified on his plan in a subsequent Tweet that said he intended to create a special fund that would allow all current Tesla shareholders to retain a stake in the car maker if they want.
At 420/share, a deal would represent a 22.8% premium to Tesla’s closing price Monday, making it one of the biggest go-private deals with a price tag of about $72-B.The company had a market value of $58 billion as of Monday’s close.
Mr. Musk owns nearly 20% of the company.
Separately, FT reported Tuesday Saudi Arabia’s sovereign wealth fund, overseen by Crown Prince Mohammed bin Salman, has built an undisclosed stake of between nearly a 5% stake in Tesla.
While Musk is known for making erratic tweets, he tweeted “420” in a reply to the media following up on his initial tweet. The company did not immediately respond to request for comment.
420 is code word for lets go smoke some ‘Dope’!
Elon Musk is under extreme pressure to prove he can deliver consistent production numbers for the M3 sedan, Tesla’s lowest-priced model and the Key to its plans to become a real automaker, after a host of manufacturing challenges and concerns it is burning cash very fast.