Electric car maker wants to delist and focus on long-term goals and rid itself of distractions
Elon Musk, outspoken Tesla CEO, overnight set the internet alight when he tweeted: "Am considering taking Tesla private at $420. Funding secured."
A company-wide email sent out by Musk, outlining the thinking and the potential mechanics behind such a move, was later published in full on the company's website.
Musk argued delisting would remove the "wild swings in our stock price that can be a major distraction for everyone working at Tesla", and the "quarterly earnings cycle [of a public company] that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term".
Tesla has proposed a US$420 ($565) buyback price for all interested shareholders. The company has proposed a scheme, similar to the one used for SpaceX, where employees and stockholders would continue to hold shares in Tesla with defined windows "approximately every six months" where everyone could exercise options, buy in or cash out.
Given Musk noted a "final decision has not yet been made", some analysts have speculated this may be a move designed to hurt those who have shorted the company in the belief its share price will drop dramatically.
In the email, Musk reasoned being a public company means "there are large numbers of people who have the incentive to attack the company".
The company's stock price jumped from US$342.54 ($460.76) prior to the announcement to US$379.57 ($510.60) at the day's close, a rise of almost 11 per cent, but still significantly short of the proposed buy back price.
The CEO also sought to allay fears he wanted to merge SpaceX and Tesla, or was "accumulating [more] control for myself".
It's not clear how and with whom the company has secured funding, or when the company will begin the formal process of buying up shares and taking itself off the NASDAQ stock exchange.
Should Tesla decide to go down this route, it will need to be approved by a shareholder vote.