New York, Aug 8 (IANS) Tesla boss Elon Musk is considering taking the electric-car firm private, a move he claimed was the “best path forward” for the company.
Musk said de-listing from the stock exchange meant Tesla would no longer be pressured into making short-term decisions to appease investors, BBC reported on Tuesday.
In an unusual move, Musk first made the announcement on Twitter rather than via an official regulatory disclosure.
He said investors backed the plan which requires a shareholder vote.
He said shareholders would be offered $420 per share – around a fifth higher than the current price.
Musk claimed to have secured funding to buy out shareholders, but did not offer any further detail.
However, he also warned that “a final decision has not been made” about the move.
Tesla shares ended the day 11 per cent higher at almost $380 per share — close to their all-time high.
Trading in the shares was initially suspended after Mr Musk’s tweets – pending a more formal announcement.
While Twitter was an unconventional way to make the announcement, the US market regulator, the Securities and Exchange Commission, allows firms to use social media outlets like Facebook and Twitter in this way provided investors have been told which social media outlets will be used.
In 2013, Tesla flagged Musk’s Twitter account as a source of information.
The firm subsequently shared a message from Musk to employees that explained the thinking behind his announcement.
Musk, who owns almost 20% of the company, said he hoped the move would shield the firm from distracting swings in the share price and the pressure to meet quarterly financial targets.
He also said he wanted to end “negative propaganda” from short sellers, investors who bet on the shares of a firm going down.
“Basically, 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,” he wrote.
Musk has discussed the drawbacks of being a public company before. But his tweets stirred confusion initially, given his history of informal use of the social media service.
For example, on April Fool’s Day, he joked on Twitter about Tesla going bankrupt.