Sometimes, a company's management and shareholders see going private as a prime opportunity to instantly cash out their holdings in a company at a considerable premium instead of having to bet that the company's shares will eventually gain a comparable amount of value on the stock market.
In other cases, a company might want to avoid some of the pressures of being public, such as having to regularly file public documents showing the company's latest finances, as well as the pressure from public markets to hit short-term goals, which can send stock prices swinging wildly from day to day, causing shareholder distress.
Based on his comments, Musk's reasoning presumably has something to do with the pressures of being public.
In the past, Musk has clashed with Wall Street analysts on earnings calls when Tesla reports its quarterly numbers,
In the past, Musk has clashed with Wall Street analysts on earnings calls when Tesla reports its quarterly numbers — on a call in May, Musk called a question "boring" after he was asked about gross margins on Tesla's Model 3. By taking Tesla private, Musk would no longer have to deal with quarterly earnings calls and the pressure for the company to hit specific quarterly financial goals.
"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," Musk says in his blog post.
Being a public company also means that every piece of news, or financial results, from Tesla can affect the company's share price for better or worse. That can be a source of frustration, Musk writes.
"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 writes. Musk believes that Tesla is "at our best when everyone is focused on executing" the company's long-term strategy, rather than getting distracted by short-term goals, he says.
He also wrote in his blog post on Tuesday, that the move would be "all about creating the environment for Tesla to operate best." And in November, Musk said he wished Tesla was a private company, telling Rolling Stone: "It actually makes us less efficient to be a public company."