Tesla CEO Elon Musk announces plan to take company private

PALO ALTO, Calif. (KTVU) - On Tuesday Elon Musk announced, on Twitter, his plan to take Tesla private. The market reacted sending Tesla stock up 11 percent. 

For months, Tesla faced questions and criticism from investors about production, finances, and the new Model 3.

Now Tesla may be going private,removing itself from the mercies of the market. Elon Musk made the announcement Tuesday with a Tweet.

Robert Eberhart of Santa Clara University's Leavey School of Business says, "It's interesting that he's reacting to the pressure by saying look I'm going to take my company and go home. And again it just appears that way. So what we have to be most concerned about is what is it doing to Tesla and how is it affecting Tesla shareholders."

Tesla stock jumped, before trading was temporarily halted.

It resumed following a more formal announcement from the company.

In it Musk says a final decision has not yet been made but that he wants, "...an outcome where Tesla can operate at its best, free from as much short-term thinking as possible..."

Eberhart says, "His actions have a great deal to do with the value of that company, so when he announces he's going to do something, some people react, you saw the price go up. And now he has a committment to follow through on that, or he's got some explaining to do."

Automotive journalist Gary Lieber believes the company will follow through. He says Elon Musk should not be underestimated.

Lieber says, "There is so much public grief that he gets. I think this is a good way to get out from the scrutiny, the microscopic scrutiny that he's under right now."

Musk has said the goal is to go private at $420 a share and then to give shareholders a choice.
Sellor remain invested in the company in a special purpose fund which allows buying and selling every six months.

Lieber is a shareholder and says it's a choice he'd be happy to have.

He says, "Well I'd take 420 for a share of stock today. We'll see, we'll have to see how it plays out." 

In a follow up tweet this afternoon, Elon Musk said that investor support is confirmed and that the only reason why this move isn't certain is that its contingent on a shareholder vote.