Tesla shares ended over 10% higher in the US Tuesday, after CEO Elon Musk shared the news he is considering making his electric car firm private. He initially announced the possible move in a tweet, before sharing a more detailed blog post on the possible plan.
He said that removing Tesla shares from the publicly listed domain would be better for the business. However, no final decision has been made.
Tesla shares ended the US Tuesday trading session $10.99 higher at $379.57. The stock is a little lower in out-of-hours activity.
Tesla to become privately owned?
News that Musk is seriously considering changing Tesla from being a publicly listed business, to a privately held one was first announced in a tweet.
“Am considering taking Tesla private at $420. Funding secured,” Musk said on Twitter.
He followed that comment up with responses to some followers and included some bare details, including that h hoped all the current investors in the electric car maker would remain on board even if it became a privately-owned entity.
Tesla’s enigmatic CEO and chairman then posted an official company blog with more details over the rationale behind the possible change.
Why change from public to private?
In an email to Tesla employees, which was also shared as a blog post, Musk said that as a privately-owned business, the innovative car maker could focus more on what’s best for the company and less on often unexpected stock-market related swings.
“The reason for doing this is all about creating the environment for Tesla to operate best,” Musk wrote.
“I fundamentally believe that we are at our 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,” the email goes on to say.
“I’m trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible,” Musk adds.