Tesla stock soared Tuesday afternoon amid rumors that CEO Elon Musk might take the electric auto and solar power generation company private. The company had a market value of $58 billion as of Monday's close.
"First, a final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best", he wrote in the letter, adding that he came to the price of $420 by applying a 20% premium to the company's post second quarter earnings.
Tesla CEO Elon Musk, in true Elon Musk fashion, took to Twitter to think out loud about his electric auto business.
Tesla shares were already trading higher today because of a report in the Financial Times of a new stake from the Saudi Arabia sovereign wealth fund. The company said it expects to be profitable during the second half of 2018.
Musk complained that Tesla is "the most shorted stock in the history of the stock market" and many people "have the incentive to attack the company".
While Mr Musk has previously discussed the drawbacks of being a public company, he has also used his Twitter account in ways that surprised investors.
While the decision isn't set in stone, Musk layout out a provisional plan to take the company private.
His asking price of $420 would be 22 percent of Monday's closing share price, and almost 9 percent above the stock's all-time closing high of $385.
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Despite the fact that publicly-available FEC documents prove his donations to the PAC, Musk tweeted on Saturday that "reports that I am a top donor of the GOP are categorically false". He clashed with analysts on a contentious call after Tesla reported earnings three months ago. ("Yes", Musk replied.) He expressed hope that current investors would stay with the company, later adding that shareholders could either "sell at [$420] or hold shares & go private". He also said he does not now have a controlling vote in the company and wouldn't expect a single shareholder to have one if the company were private.
Galileo Russell, founder of HyperChange TV and an outspoken supporter of Musk and Tesla, said in an interview on Cheddar he doesn't want to sell his shares.
Making money has proven elusive for Tesla while it has been investing in electric auto technology and ramping up production of its vehicles, including a sedan with a starting price of $35,000 to appeal to a broader audience.
But asked if he would take legal action against Musk over the allegation, Unsworth said: 'If it's what I think it is yes'.
A spokesman for Tesla did not immediately return a request for comment.
After his initial tweet, he followed up several times when answering questions from users on the platform.
But the market appeared to take him seriously with Tesla shares surging on the news.
The move comes as Mr. Musk has been under mounting pressure from investors and analysts to stem Tesla's financial losses after repeatedly missing production targets for the Model 3, its mass-market sedan, even as it faces increased competition from major automakers, several of whom are planning electric vehicle offerings.