Elon Musk plans to take Tesla private

Tesla CEO Elon Musk has proposed on Twitter that he plans to take the electric carmaker private. The announcement caused a frenzy in the NASDAQ stock exchange and trading had to be temporarily halted.

The move would need to be finalized through a vote of shareholders. In an email to Tesla employees, the CEO explained the possible ways to go forward as well as the reason for going private. At present, being a publicly listed company, the all-electric carmaker has to stick to a quarterly earnings cycle which prevents Tesla from making accurate long-term decisions. Further, fluctuations in the share price could act as a distraction to many employees as well.

According to Musk’s plan, the company would offer US $420 per share, US $40 more than the previous day’s trading value. Shareholders wanting to stay invested can continue to hold the company shares while employees would be able to buy or sell their holdings periodically.

Musk also revealed that he held 20% shares of Tesla and there are no plans to merge the company with SpaceX, although both companies will have a similar ownership and governance structure.

Source: Electrik