Elon Musk: Taking Tesla private is best path for the company
He claims "wild swings" in stock price have distracted the company from long-term goals
Elon Musk has launched a bid to take his electric car company Tesla private in a move that he says will be the "best path forward" for the company in the long term.
True to his unconventional form, Musk announced the decision on Twitter, saying that delisting the company would mean it would no longer be making decisions based on short-term investor needs, and instead work towards longer-term goals.
Following an initial message to say he was "considering" taking the company private, stocks in the company surged by 7%.
Musk said that current shareholders would expect to receive $420 (325) per share a fifth above the current price and valuing the company at $82 billion. For context, Tesla hit just under $64 billion on Tuesday.
He added that funding had already been secured for the move but offered no further detail.
In a letter sent out to employees shortly after, he said that a "decision had not yet been made", but that "wild swings" in the company's stock price had been a "major" distraction for the company.
"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," he said.
Musk himself has played a role in Tesla's fluctuating share price over recent months, as his often unconventional approach to business and unpredictable behaviour have made investors sheepish about long-term prospects.
Musk famously sparked anger in May when he made a number of erratic statements during an investor call, suggesting that the questions he was being asked were dull and eventually refusing to proceed.
Most recently he became embroiled in a potential libel case after he suggested that diver Vernon Unsworth, one of those involved in the rescue of 12 boys and their teacher from a cave in Thailand, was a "pedo". He has since apologised for both incidents.
His tweet appeared shortly after a report by the Financial Times that revealed Saudi Arabia had recently built up a stake worth $2.9 billion, between 3% and 5% of the company.
Saudi Arabia's public investment fund approached Musk earlier this year to offer to invest directly into the company in exchange for more shares, something which Musk refused, according to the report. This then prompted the PIF to purchase more stocks through the market instead.
Musk said that investors can also choose to retain their stake in the company if they wish, and that he plans to stay on as CEO once the deal completes.
"This has nothing to do with accumulating control for myself," he added. "I own about 20% of the company now, and I don't envision that being substantially different after any deal is completed.
Speaking to the BBC, analyst Gene Munster said that Musk had a "one-in-three chance" at succeeding with his plans, adding that the 16% premium to the price may not be high enough to incentivise existing shareholders to support the sale".
If Musk follows through with his plans, it would make it the largest buyout in history.