By taking Tesla private, Musk believes that the company will be able to sharpen its long-term focus of revolutionizing an automobile industry dominated by fuel-combustion vehicles without having to cater to investors' fixation on how the business is faring from one quarter to the next.
USA regulators are examining how Tesla Inc (TSLA.O) Chief Executive Elon Musk announced his plan to take the electric carmaker private and whether his statement was truthful, the Wall Street Journal reported on Wednesday.
'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.
Several securities attorneys told Reuters that Musk could face investor lawsuits if it was proven he did not have secure financing at the time of his tweet.
Musk mused Tesla could be bought back at $420 per share.
An acquisition of Palo Alto, California-based Tesla by overseas investors would likely trigger a national-security review by the Committee on Foreign Investment in the U.S. The panel, which has stepped up its scrutiny and blocked some deals lately, could impose conditions, including limits on control of the company and information sharing.
Elon Musk, founder, CEO and lead designer at SpaceX and co-founder of Tesla, speaks at the International Space Station Research and Development Conference in Washington, U.S., July 19, 2017. At that price, and given Musk's 20% stake in Tesla, roughly $60 billion would be needed to go private.
He said that would allow Tesla to "operate at its best, free from as much distraction and short-term thinking as possible".
Musk has promised a sustained net profit starting in the third quarter.
The issue of share accumulation by outsiders emerged only recently as reports that Saudi Arabia's public investment fund had built up a stake from 3 to 5 percent after its offers of purchase of new shares in Tesla were spurned by the company.
Any buy-out would require a shareholder vote. "If the process ends the way I expect it will, a private Tesla would ultimately be an enormous opportunity for all of us".
Tesla shares fell 2.4 percent to $370.34 on Wednesday after closing up 11 percent on Tuesday.
SoftBank is now not interested in a deal for Tesla after earlier this year taking a stake in General Motors Co's (GM.N) self-driving unit, Cruise, Reuters reported earlier on Wednesday. The move is estimated to require north of $50 billion to buy out the public shareholders.
Most analysts were skeptical, but some said a deal could materialize if Musk succeeded in lining up the right funding. Many initially thought it was Elon Musk's attempt at a bad joke about marijuana, because "420" has always been associated with pot.
Days after Tesla opened up the Model 3 configurator to all potential buyers, not just reservation holders who got a place in line over a year ago, uncomfortable math lingers over the automaker's.