USA regulators are examining how Tesla chief executive Elon Musk announced his plan to take the electric carmaker private and whether his statement was truthful, the Wall Street Journal reported. If Musk were to take his company private, analysts say the value of the company would jump to $82 billion.
Musk proposed offering shareholders a stock buyback at $420 per share, or 20 percent higher than the price at the end of the company's second-quarter earnings call, though he also pointed out that the price has risen 16 percent since, limiting this offer's attractiveness to shareholders.
The eccentric Musk announced the bombshell move Tuesday on Twitter, writing that he had secured funding to buy Tesla Inc.'s shares at $420 each.
Musk later explained in an email to company employees why he is considering taking Tesla private but also said "a final decision has not yet been made". On the basis of both the total dollar amount, and the fact that Tesla has yet to turn a profit, the deal would be "unprecedented" in the annals of public companies going private, Barron's notes.
"Just because" Musk wants it at $420 "doesn't mean that there aren't other people who might be willing to come in with another transaction that would be more beneficial to shareholders", Pitt said.
Elon Musk's tweets early on Tuesday caused plenty of speculation and controversy.
Some on Wall Street shared that view.
On Wednesday, Breitbart News' Economics and Finance editor John Carney expressed doubts about plans to take Tesla private, suggesting the move may face insurmountable legal headwinds.
Net net, Rusch reiterates an Outperform rating on Tesla shares, with a price target of $385, which represents a slight upside potential from current levels.
SoftBank is now not interested in a deal for Tesla after earlier this year taking a stake in General Motors Co's self-driving unit, Cruise, Reuters reported earlier on Wednesday. He claims Tesla is the most shorted stock "in the history of the stock market" and that going private would remove them from the narrative.
There still are near-term execution risks around ramping up Model 3 production and the ability to generate cash, Jonas believes.
Mr Musk and SoftBank held unsuccessful talks about a take-private deal in April 2017, according to a source familiar with the matter. Tesla's other board members are Musk, his brother Kimbal Musk and venture capitalist Steve Jurvetson.