Tuesday of last week, Elon Musk took to Twitter to tell his followers his consideration of “taking Tesla private at $420.” He even went on to mention that “funding [is] secured” and “investor support confirmed.” But was Musk serious, and if so, what could this mean for Tesla (NASDAQ:TSLA)?
Prior to Musk’s tweets about taking Tesla private, he subsequently met with the managing director of Saudi Arabia’s sovereign wealth fund. Musk said that his August 7th tweet about funding being secured was in reaction to positive outcome of his meeting with the Saudi managing director, stating he has “no question that a deal with the Saudi sovereign fund could be close, and that it was just a matter of getting the process moving.”
Although Musk is confident in his talks with the Saudi sovereign fund, he plans to continue to speak with other investors as he plans to “continue to have a broad investor base.”
It is apparent that Musk’s intentions to take Tesla private deviate from negative media, “propaganda”, and shorts. Specifically, Musk wrote on Twitter that taking the company private would let Tesla operate “way smoother and less disruptive as a private company.” He also referenced negative media as well as alleged propaganda saying that taking the company private would “end negative propaganda from shorts.”
Musk is also reportedly working with Goldman Sachs and Silver Lake acting as financial advisors for taking Tesla private.
Nonetheless, the market reacted with a nice gain of 10% highs upon Musk’s tweet about taking the company private. Many analysts such as Rob Cihra, Pierre Ferragu and Alexander Haissl have price targets at and above the “$420” tweeted price, with the highest target being $530.