Elon Musk Wants To Take Tesla Private

Aug 8, 2018
Originally published on August 8, 2018 7:50 am
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RACHEL MARTIN, HOST:

Tesla may be in for a dramatic ride. On Tuesday, the CEO, Elon Musk, went on Twitter to announce he is considering taking the company private, and Tesla's stock soared. Was that what Musk intended? NPR's Jasmine Garsd covers technology. She's here with us now. Hey, Jasmine.

JASMINE GARSD, BYLINE: Hi, Rachel.

MARTIN: So he made this announcement on Twitter - sort of unusual for such an important announcement but pretty much in line with how Musk operates, right?

GARSD: Yeah. This is what Musk does. He takes on Twitter and speaks his mind.

MARTIN: So why did this happen? I mean, why did he make this suggestion about going private?

GARSD: Musk has always expressed annoyance at the way Tesla, being a public company, beholds him to investors - the fact that he has to do these quarterly earnings reports and explain himself and his every move. He said that it puts unnecessary pressure on the company to make decisions that maybe aren't good in the long term. And he gets really annoyed. In fact, in one earnings call this year, he got so annoyed - let me play you a clip.

(SOUNDBITE OF ARCHIVED RECORDING)

ELON MUSK: Next. Boring, boneheaded questions are not cool. Next.

GARSD: That's Musk calling an analyst's questions boring and boneheaded. And he later apologized. But, you know, another thorn in Musk's side has been Tesla's short-seller problem. Tesla is known for attracting a significant number of short sellers. These are investors who bet against the company.

MARTIN: Right.

GARSD: They profit when the company's stock drops, and they benefit from bad rumors about the company. Musk has suggested that going private would end what he calls short sellers' negative propaganda campaign.

MARTIN: But did he intend to do this as a test balloon so that stock prices would go up?

GARSD: Well...

MARTIN: I guess we can't know.

GARSD: We can't. I mean, if he did that, that would cause a lot of concern for investors, and it could get him in hot water. You know, Harvey Pitt, the former head of the S.E.C., yesterday - S.E.C., the federal agency that regulates trading of stocks and bonds - he spoke on CNBC, and he pointed out that Musk's tweets could get him in trouble if he tried to manipulate the stock.

MARTIN: So what does this whole thing mean for investors? I mean, it seems like people just can't look away from Tesla as investors. They're totally attracted to this situation.

GARSD: Well, it comes at a really pivotal time for Tesla. You know, they just released the Model 3 sedan, with which they hope to cross over from being this luxury car brand to a mass-market automaker, and they're spending a lot of money to achieve it. A lot is at stake here. And Musk has said he hopes all investors stay onboard.

MARTIN: OK. NPR's Jasmine Garsd. Thanks, Jas (ph).

GARSD: Thank you. Transcript provided by NPR, Copyright NPR.