Munster predicted a one-in-three chance that Musk will actually take Tesla private. At $420 per share, a deal would be worth $72 billion overall.
"My intention is for all Tesla employees to remain shareholders of the company, just as is the case at SpaceX", Musk said.
The announcement, made initially via Twitter, stunned investors and sent Tesla's stock price soaring as much as 13 percent. That would cost about $70 billion, making it one of the biggest buyouts in USA history. It has lost money on an operating basis every year since it went public and it's been burning through billions of dollars as it's ironed out production issues with its Model 3 sedan. It's the latter Musk seems to want to mute by going private, as he lamented the pressure that putting out quarterly reports (which are mandated by law for public companies) puts on the company to make decisions that will look better in the short term but not serve Tesla best in the long run. However, given Musk's lack of concern for industry norms and his ongoing feud with short-sellers, it's not out of the realm of possibility.
Musk is Tesla's largest shareholder, with an approximately 20 percent stake valued at about $12 billion, according to S&P Capital IQ. He said in his letter to employees that he did not seek to expand his ownership.
The company's shares rose more than 7% on the news, before Tesla trading was halted. This is not to say that it will make sense for Tesla to be private over the long-term.
"The 16% premium to current share price may not be high enough to incentivize existing shareholders to support the sale", Munster wrote in a note.
Un Vidal en chasse un autre — Mercato Barça
Histoire de passer la visite médicale traditionnelle et de signer, dans la foulée ou presque, un contrat jusqu'au 30 juin 2021. Le Barça et le FC Bayern se seraient déjà entendu sur le montant de l'indemnité de transfert (20 millions d'euros).
NYU Marketing Professor Scott Galloway on Tesla CEO Elon Musk tweeting that he is considering taking the company private. It's not hard to imagine the gyrations that Tesla's stock would go through if Musk's plan was scrapped or substantially changed.
Raising both the debt and equity required for such a deal would be a challenge. About an hour and 20 minutes after the Musk tweet, trading in Tesla stock was suspended because the company was expected to release news.
Tesla did not immediately respond to a request for clarification.
Despite the unconventional method of disclosing such information, analysts took Musk at his word.
"I believe Tesla considers Tweets as public disclosure", said analyst Chaim Siegel from Elazar Advisors.
The firm's shares climbed more than 6% after the tweet, but the Nasdaq later halted trading pending an announcement.