07 August 2018•Update: 08 August 2018
By Ovunc Kutlu
NEW YORK
Electric carmaker Tesla saw its shares halted on the U.S. stock market Tuesday after CEO Elon Musk said he could take the firm private.
"Am considering taking Tesla private at $420. Funding secured," Musk wrote on Twitter, saying "Shareholders could either to sell at 420 or hold shares & go private ... Will ensure their prosperity in any scenario."
The co-founder also argued that operations would be "way smoother" and "less disruptive" if the company goes private.
After more than a hours, trading resumed with shares up more than 10 percent.
The Financial Times reported earlier Tuesday that Saudi Arabia's Public Investment Fund, one of the biggest sovereign wealth funds in the world, acquired a stake of between 3 and 5 percent of Tesla shares this year.
As a result, shares soared 8.5 percent to as high as $371.15, giving the company a market capitalization of $62.4 billion.
If the company is privatized at $420 a share, that would give Tesla a valuation of $70.6 billion.
After Musk's tweets, however, Tesla shares were halted shortly after 2 p.m. EST (1800GMT) by the Nasdaq at $367 a share.
Later, Musk, in an email to employees, said a final decision about privatizing the story has not been made.
He, however, argued that his decision to privatize the firm stems from the fluctuations in the stock price negatively affecting the company, and its quarterly results putting pressure on the firm.
"As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders," he said.
"Being public also subjects us to the quarterly earnings cycle 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," he added.
