Elon Musk is considering taking Tesla private at a price of $420 per share

Tesla Inc.’s CEO is considering taking Tesla private at a price of $420 per share. »A final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best,« says Musk in an email sent to the company’s employees. »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.« Being public also subjects the company »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.« Furthermore, being public »means that there are large numbers of people who have the incentive to attack the company,« says Musk. He believes, that the company is at its best »when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we’re all trying to achieve.« Once Tesla enters »a phase of slower, more predictable growth, it will likely make sense to return to the public markets.«
Shareholders have the choice to stay investors in a private Tesla or they can be bought out at $420 per share, which is a 20 percent premium over the stock price following the Q2 earnings. SpaceX and Tesla would continue to have separate ownership and governance structures.
Musk owns about 20 percent of the company now, »and I don’t envision that being substantially different after any deal is completed.« This proposal to go private would ultimately be finalized through a vote of our shareholders, says Musk in his email.

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