Trading in Tesla stock suspended after Musk tweet on going private

Elon Musk

The stock spiked on the initial news, with shares rising more than 10% as trading resumed. "Funding secured", the account reads. That would cost about $70 billion, making it one of the biggest buyouts in US history.

"The reason for doing this is all about creating the environment for Tesla to operate best", Musk, 47, wrote in an email to employees.

When another person tweeted that going private "saves a lot of headaches", Musk replied, "Yes". Musk has feuded publicly with regulators, critics, short sellers and reporters, and some analysts have suggested that less transparency would be welcomed by Musk.

The contracts were bought minutes after the Financial Times, citing unnamed people with direct knowledge of the matter, reported Saudi Arabia's sovereign wealth fund has built a significant stake in Tesla.

The news caused Tesla's share price to jump by $14.

Tesla did not respond to a request for comment immediately.

"His mission for Tesla (to accelerate the globe's adoption of sustainable energy) is both grand and long-term, making it hard to accommodate investors quarterly expectations", he wrote.

Musk's other company, aerospace firm SpaceX, is privately owned.

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After Musk, the next largest shareholders in Tesla are the mutual fund giants T. Rowe Price and Fidelity, with stakes of more than 9% and 8%, respectively, according to Thomas Reuters Eikon.

"Funding secured", the tweet added, offering no further details on timing or source of funding.

Musk has every incentive to try to either drive up the stock price or eliminate the need for public reporting on sales and finances by taking the company private.

"I don't have a controlling vote now & wouldn't expect any shareholder to have one if we go private", Musk said in a follow-up tweet.

"Elon Musk does not want to run public companies", Munster said.

Munster also said he did not see legal risk from Musk's tweets due to the Reed Hastings Rule, an SEC guideline announced in 2013 that said it was OK for companies to reveal key information on social media as long as investors have been alerted.

The tweet "might constitute fraud if any of the facts he disclosed are not true", Pitt said on CNBC.

Short interest in Tesla on Monday stood at almost $12 billion United States, equivalent to 28 per cent of its float, according to S3 Partners, a financial analytics firm. They are also shielded from the ups and downs of the stock market.

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