Tesla CEO Elon Musk tweeted that he is considering taking Tesla private when shares in the electric carmaker hit $420. The news comes as the Saudi government revealed a huge stake in the company.
“Am considering taking Tesla private at $420,” Musk tweeted on Tuesday, adding that he had “funding secured.”
In a blog post on Tuesday, Musk cited three reasons for wanting to take the company private: removing the “major distraction” of fluctuating stock prices, getting away from the pressure of quarterly earnings cycles, and removing “perverse incentives for people to try to harm what we’re all trying to achieve.”
As the “most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company,” Musk wrote.
There are no plans to merge Tesla with SpaceX, but instead to restructure the carmaker along the lines of the space company, where all the employees are shareholders and both they and external shareholders can buy or sell about every six months.
“In the future, once Tesla enters a phase of slower, more predictable growth, it will likely make sense to return to the public markets,” Musk wrote.
Tesla has been publicly traded since 2010, and has seen its share price rise from just under $20 then to $360 at time of writing. The company is currently valued at just over $60 billion, with Musk holding an almost 20 percent stake in the company.
Musk’s surprise announcement comes as the Financial Times revealed that a fund controlled by the Saudi Arabian government holds a stake of between three and five percent in the company.
The news caused Tesla’s share price to jump by $14. However, they are still a long way off the $420 price teased by Musk. If Musk were to make good on his tweet, it is unclear from where he could secure funding to buy out Tesla’s shareholders.
Before its recent rally, Tesla’s share price had been in a downward spiral for much of the summer, as the company struggled to meet production targets for its midrange Model 3 sedan.
Musk’s erratic behavior on Twitter also worried investors. On top of his ongoing feuds with journalists, Musk called a diver involved with the rescue of a Thai children’s soccer team a “pedo,” an outburst that knocked four percent off Tesla’s value.
Taking Tesla private would take some pressure off Musk to behave, and would free him from having to deliver quarterly earnings reports, which have so far this year shown losses. Musk has said that he expects Tesla to finally show profits in the third quarter of this year.