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Tesla Could Be Taken Private, Tweets Elon Musk, Shares Rise

Tesla Could Be Taken Private, Tweets Elon Musk,  Shares Rise
Tesla shares spiked following a tweeter comment by its CEO Elon Musk that he is contemplating taking the company private. 
The out-of-the blue announcement by Musk was in keeping with the unorthodox style followed my Musk and in keeping with his trend of surprising the markets and investors. Musk said in the tweet that his plan to take the company private comprised of buy back of shares at $420 a share and he already had secured funding for this purpose.
"Am considering taking Tesla private at $420. Funding secured," Musk tweeted, following it up with "good morning" and a smiley emoji.
It was just hours that a report published in the Financial Times caught the attention of the market where the reports claimed that a significant stake in the electric car company Tesla has bene taken up by Saudi Arabia's sovereign wealth fund.  However, the tweet from Musk did not it clear whether he was referring to that investment.
A stake of anywhere between 3 and 5 per cent of the shares of Tesla were taken up by the Saudi Arabia's Public Investment Fund, said The Financial Times report quoting anonymous people with direct knowledge of the matter.
There has been no comments available form Tesla on the report. The shares of the company rose by more than 5 per cent at over $360. Markets and experts however have said that the casual manner in which the head of Tesla had made such a major announcement is not usual in the business world.
Questions about the seriousness of Musk’s intentions were raised after the tweet. The asking price quoted by Musk of $ 420 a share would be 22 per cent of the closing price of Tesla shares as on Monday and the figure would also be about 9 per cent more than the all time high that the shares had ever touched at $385. That figure even drew some jokes on Twitter about whether it was a pot reference, with 420 being a common slang term for marijuana.
It has just been about two weeks that Tesla had reported that it had burnt $739.5 million in the second quarter resulting a net loss of a record $717.5 million in its efforts ot reach its target of churning out 5000 cars in a week.
The company managed to reach its self-imposed target of manufacturing 5,000 Model 3 sedans every week at the end of June and had burnt through loads of cash in the process. Now the company has set itself a target of manufacturing over 6000 cars a week by the end of August because its says that its production capacity is increasing.
Earlier this month, Musk promised that the company would achieve net profits in the future quarters and said that it would be possible for Tesla to not go to the markets again to raise money against equity and therefore attaint self-reliance ion the near future. 

Christopher J. Mitchell

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