Elon Musk considers taking Tesla private

(Reuters) – Elon Musk is considering taking Tesla Inc private, the electric car maker’s chief executive tweeted on Tuesday.

FILE PHOTO: Elon Musk listens at a press conference following the first launch of a SpaceX Falcon Heavy rocket at the Kennedy Space Center in Cape Canaveral, Florida, U.S., February 6, 2018. REUTERS/Joe Skipper/File Photo

“Am considering taking Tesla private at $420. Funding secured,” Musk said. bit.ly/2Om3gn3

At $420 per share, a deal would represent a 22.8 percent premium to Tesla’s closing price on Monday, making it one of the biggest go-private deals with a price tag of about $72 billion.

Tesla’s shares were up 6.5 percent at $363.46. The company had a market value of $58 billion as of Monday’s close. Musk owns nearly 20 percent of the company.

A Tesla electric car supercharger station is seen in Los Angeles, California, U.S. August 2, 2018. REUTERS/Lucy Nicholson

Separately, Financial Times reported on Tuesday Saudi Arabia’s sovereign wealth fund, overseen by Crown Prince Mohammed bin Salman, has built an undisclosed stake of between 3 and 5 percent stake in Tesla.

“I believe Tesla considers Tweets as public disclosure. I think he’s serious. Plus this is short squeeze rocket fuel after a nice quarter,” said analyst Chaim Siegel from Elazar Advisors.

While Musk is known for making erratic tweets, he tweeted “420” in a reply to Fox Business anchor Liz Claman, following up on his initial tweet. The company did not immediately respond to request for comment.

“If true, this would be an incredible and surprising development. We still would see risk to completion of such a deal,” said CFRA analyst Efraim Levy.

He is also under intense pressure to prove he can deliver consistent production numbers for the Model 3 sedan, Tesla’s lowest-priced model and the key to its plans to become a mass-market automaker, after a host of manufacturing challenges and concerns it was burning cash too quickly.

Reporting by Sonam Rai in Bengaluru; Editing by Saumyadeb Chakrabarty