Elon Musk considering taking Tesla private

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The California auto maker has burned through US$1.8-billion in the first half of 2018 and is among the most-shorted stocks on the USA markets.

A leveraged buyout of this size - one using debt - would eclipse by a wide margin the prior record, the purchase for utility TXU Corp.in 2007 by a consortium that included KKR and TPG for US$44 billion.

Tesla CEO Elon Musk's discussion of privatizing the company's shares sparked a seesaw in prices before trading was suspended.

Tesla and its investors are no stranger to seeing the company's share price follow a rollercoaster trajectory.

Taking Tesla private would certainly qualify. "Funding secured, ' Musk tweeted, following up with 'good morning" and a smiley emoji.

The tweets came after a report in the Financial Times that Saudi Arabia's sovereign wealth fund had taken a 3%-5% stake in Tesla, a holding worth at least $1.9bn.

VideoJamie Albertine, Consumer Edge Research senior automotive analyst, discusses Tesla Inc. This is partially because Musk has resisted selling new shares this year, to the chagrin of Moody's rating agency.

The tweet prompted questions about how serious Musk's intentions were.

Musk did not disclose the source of the funding.

It's highly unusual for the head of a major company make a significant announcement in such casual manner.

While Musk has described himself as "half Democrat, half Repulican" in the past, it struck many as hypocritical that a green energy CEO would donate almost $40,000 (£30,700) to help keep in power a political party that has largely ignored or denied climate change. But he said the idea made a certain amount of sense.

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Camera IconTesla's existing shareholders could be given the option of retaining a stake in the company through a special fund.

Musk also wants Tesla's employees to remain shareholders. When trading resumed, prices reached beyond $380, representing a rise for the day in excess of 11 percent.

Even before the take-private tweet, Tuesday was shaping up as an interesting day for Tesla.

Shortly after, Mr Musk responded to replies to his tweet, asking if he would remain in control of the company.

That said, Musk and Tesla don't fit any historic templates for CEOs or vehicle companies.

It's not clear Musk has the funding to complete the deal, and he would need a majority of shareholders to agree to the plan.

At 12:48 p.m. Eastern Daylight Time, Musk's account said, "Am considering taking Tesla private at $420".

"I believe Tesla considers Tweets as public disclosure".

"I'm trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible", Musk said. What do his latest tweets mean for the future of Tesla?

Tesla has been publicly traded since 2010, and has seen its share price rise from just under $20 then to $360 at time of writing.

Mr Musk has long raged against short sellers and mentioned his desire to be rid of them as one of his reasons for taking Tesla private. The company had a market value of $58bn as of Monday's close.

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