Tesla shares dip after Elon Musk proposes going private
Shares of electric car-maker Tesla opened slightly lower on Wednesday, one day after a proposal to go private pushed the company's stock near an all-time high.
Tesla stock opened at $369.09 on Wednesday, sliding nearly 3 percent from its Tuesday closing price of $379.57. It rose slightly in early trading, moving to about $375 per share by 10:45 a.m. ET.
Shares skyrocketed the day before, after CEO Elon Musk tweeted he was considering taking the company private and had "funding secured." Musk set a price of $420 a share, substantially above the stock's current trading price and Tesla's all-time closing high of $385 a share.
Musk later clarified in a blog post that "a final decision has not yet been made," while touting the benefits of running a private company away from the "enormous pressure" of Wall Street's quarterly earnings cycle.
On Wednesday, Tesla's board said it was evaluating the proposal.
"Last week, Elon opened a discussion with the board about taking the company private. This included discussion as to how being private could better serve Tesla's long-term interests, and also addressed the funding for this to occur," the statement said. "The board has met several times over the last week and is taking the appropriate next steps to evaluate this."
Bernstein analyst Toni Sacconaghi said Musk's statements puts Tesla under pressure to detail how it intends to proceed with the deal to go private. The transaction would amount to the largest leveraged buyout -- in which a company borrows money to repurchase shares and exit the public market -- of all time.
"[W]e wonder how fully fleshed out Elon's tweets yesterday were," he wrote in a note. "The nature of the delivery (through Twitter) was unconventional at best, and seemingly whimsical at worst. At risk, of course, is that anything short of a formal take-private offer could trigger lawsuits from burned short-sellers, or at worst, public pressure to remove Musk as CEO."
