| 6 minutes read

6 minutes read

Thanks To Elon Musk’s Marketing Skills, A Tweet Has Added Rs. 47,000 Crore To Tesla’s Net Worth.

| Published on August 8, 2018

Tesla CEO Elon Musk has the habit of surprising people with his tweets. On Tuesday, he published a letter revealing his thoughts on taking the company private.

A single tweet of Musk has created a buzz on the internet and has led the price of Tesla shares to stop trading, with an addition of $7 billion (Rs. 47,000 crores) in company’s market cap.


Am considering taking Tesla private at $420. Funding secured. Musk wrote

Also Read: Who Was Elon Musk Before Becoming A Billionaire?


A letter was published on Tesla’sofficial website after this tweet but his letter makes no mention of taking the company private. The letter reads “a final decision has not yet been made” whether or not to take Tesla private.

This was another clever tactic from Musk as Tesla’s stock immediately jumped 7% as investors were quick to see this as an opportunity of earning some quick bucks. Some believed that Musk’s account had been hacked. While others thought that it was a joke, considering that 420 is a common reference to the smoking of marijuana.

Below is the complete letter from Musk, which was also sent to Tesla employees:

Earlier today, I announced that I’m considering taking Tesla private at a price of $420/share. I wanted to let you know my rationale for this, and why I think this is the best path forward.

First, a final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best. 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.

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. Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company.

I fundamentally believe that we are at our best when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we’re all trying to achieve. This is especially true for a company like Tesla that has a long-term, forward-looking mission.

SpaceX is a perfect example: it is far more operationally efficient, and that is largely due to the fact that it is privately held. This is not to say that it will make sense for Tesla to be private over the long-term. In the future, once Tesla enters a phase of slower, more predictable growth, it will likely make sense to return to the public markets. Here’s what I envision being private would mean for all shareholders, including all of our employees.

First, I would like to structure this so that all shareholders have a choice. Either they can stay investors in a private Tesla or they can be bought out at $420 per share, which is a 20% premium over the stock price following our Q2 earnings call (which had already increased by 16%). My hope is for all shareholders to remain, but if they prefer to be bought out, then this would enable that to happen at a nice premium.

Second, my intention is for all Tesla employees to remain shareholders of the company, just as is the case at SpaceX. If we were to go private, employees would still be able to periodically sell their shares and exercise their options. This would enable you to still share in the growing value of the company that you have all worked so hard to build over time. Third, the intention is not to merge SpaceX and Tesla.

They would continue to have separate ownership and governance structures. However, the structure envisioned for Tesla is similar in many ways to the SpaceX structure: external shareholders and employee shareholders have an opportunity to sell or buy approximately every six months.

Finally, this has nothing to do with accumulating control for myself. I own about 20% of the company now, and I don’t envision that being substantially different after any deal is completed. Basically, I’m trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible.

This proposal to go private would ultimately be finalized through a vote of our shareholders. If the process ends the way I expect it will, a private Tesla would ultimately be an enormous opportunity for all of us. Either way, the future is very bright and we’ll keep fighting to achieve our mission.

Thanks, Elon

Elon Musk

Musk has again proved his marketing skills. He has the image of a daring man who likes to play tough and gives his all. When it was weird to imagine sending rockets into space, he did that in a very quick time with SpaceX. His methods haven’t been conventional but certainly very effective.

Also Read: Tesla Founder Elon Musk Has Raised $1 Million By Selling Hats With A Simple Marketing Idea

At a price of $420 per share, Tesla would be is estimated to be around $70 billion, which will make it one of the biggest in US corporate history. Musk has even said that funding is secured, but no one really knows who’s putting in so much money into Tesla.

We don’t know about the future but as of now, Tesla’s shares have started trading again nearing Tesla’s record highs — Tesla now trades at $380 a share, which is not far away from reaching $420 target that Musk has announced for the buyout. Seeing the response Musk’s tweet had, it might be considered as the most valuable tweet of all time. Simple marketing at its best- 63 characters have ended up adding $7 billion (Rs. 47,000 crore) to Tesla’s net worth.

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