Elon Musk, CEO and the mastermind behind Tesla, Inc., has decided to buy out the entire public stock of his company at U.S. $71,000,000,000. This would turn Tesla into a privately-held business.
Musk explained that he wanted to avoid abrupt stock value fluctuations. He would first need to approve this decision with the investors, who would be given the option to either sell their stock at U.S. $420/piece (despite that their current market value is U.S. $380/piece), or keep it.
According to analyst Gene Münster, the decision is actually rather well-justified. Company’s value on the stock market tends to be extremely dependent on the contents of its quarterly reports. This leads to situations when decisions have to be made based on the short-term expectations of the investors, rather than the long-term goals of the company itself.
Elon Musk currently controls 20% of the Tesla stock. 8% to 9% belongs to such investment companies as Fidelity, T. Rowe Price, and Baillie Gifford.
Photo: fortune.com