Elon Musk tweets he may take Tesla private

Elon Musk

Elon Musk

On the social media platform he noted the possibility of taking Tesla - a publicly traded company since 2010 - private. "Funding secured." It isn't clear what prompted the tweet. Musk tweeted that early access would have bugs and was not advisable since there would have to be a plan for something to go wrong.

Tesla shares were halted around 2 p.m.in advance of pending news.

Starting in November, Tesla faces repayment of $1.7 billion in debt over the next 18 months that is tied to the company's stock price. Musk owns almost 20 percent of the company.

The first tweet was posted at 12:48 pm EST stating his interest in taking Tesla private at $420 per share, and went on to say the funding to do such a thing has been secured.

Earlier in the day, the Financial Times reported that Saudi Arabia's sovereign wealth fund, overseen by Crown Prince Mohammed bin Salman, has built an undisclosed stake of between three and five per cent stake in Tesla.

Asked on Twitter whether Musk would continue to be CEO under such a scenario, he replied there would be "no change".

Munster also said he did not see legal risk from Musk's tweets due to the Reed Hastings Rule, an SEC guideline announced in 2013 that said it was OK for companies to reveal key information on social media as long as investors have been alerted.

A buyout at US$420 per share probably won't let Musk reap any benefit from the US$2.6b stock option grant he received this year.

In a second tweet on Tuesday, Mr Musk said taking the company private would not lead to a single dominant shareholder.

The announcement, made initially via Twitter, stunned investors and sent Tesla's stock price soaring as much as 13 percent.

After Musk, the next largest shareholders in Tesla are the mutual fund giants T. Rowe Price and Fidelity, with stakes of more than 9% and 8%, respectively, according to Thomas Reuters Eikon.

"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", Musk wrote.

"I believe Tesla considers Tweets as public disclosure".

Last week Tesla said it had achieved its goal of producing 5,000 Model 3 vehicles per week by the end of its second quarter in June, but burned through $739.5m (£565.2m) in cash during the period in order to do it. I think he's serious.

Tesla did not immediate respond to requests for comment. He added: "I can't believe this is something to bluff or make fun of".

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