Tesla board mulls plan to go private

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Tesla’s board has confirmed that it will consider the proposal by chief executive Elon Musk to take it private.

A statement was issued by six members of the electric carmaker’s board after Mr Musk tweeted to say he had the funding to de-list the company.

The board had “met several times over the last week” to discuss going private, the statement said.

They said this “included discussion as to how being private could better serve Tesla’s long-term interests”.

Mr Musk said in his tweet on Tuesday that shareholders would be offered $420 (£326) per share, valuing the business at more than $70bn.

This would make it the biggest deal of its kind, surpassing the purchase of utility TXU Corp in 2007 for $44bn by a consortium.

The brief statement by six of the nine board directors said that the discussions about taking the company private had also “addressed the funding for this to occur”.

‘Wild swings’

Mr Musk had “opened a discussion with the board” last week, the six directors said. They did not include Mr Musk, his brother Kimbal Musk, and Steve Jurvetson, a venture capitalist.

The shares reached a peak of $368 after Mr Musk’s tweets, before being halted on the stock market. They were trading higher at $380 shortly after the board members issued their statement. The shares are edging towards their all-time high of $385, which they touched almost a year ago.

Mr Musk had written to staff on Tuesday to explain why he wanted to take the company private. “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,” he had written.

“Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long term,” Mr Musk wrote.

He added that the company was “the most shorted stock in the history of the stock market” – a trading strategy which assumes share prices will fall – so “being public means that there are large numbers of people who have the incentive to attack the company”.

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