Shares of Tesla jumped nearly 11 percent Tuesday after Chief Executive Elon Musk said on Twitter that he is debating taking the electric car manufacturer private.
"Am considering taking Tesla private at $420. Funding secured," the CEO wrote in his original post, adding in subsequent tweets that shareholders could either opt to sell at $420 per share or hold their stake and go private.
In an email to employees later Tuesday, Musk explained that, as a public company, Tesla shares are subject to "wild swings" in price that prove to be a "major distraction" and that Wall Street's quarter-to-quarter expectations may not necessarily be a good fit for the company.
"This is out there, even for Tesla," a Barclays note said. "Buyout would require about $70 billion: roughly $60 billion for equity and about $10 billion to take out debt. With 145 million shares, a buyout at $420/share would require $60 billion to take out all public shareholders. Even with the Saudi fund taking a 3 percent to 5 percent stake, that leaves a large funding gap. And credit markets may not be that receptive."
Here's a wrap of all the major analyst opinions going out to Wall Street analysts regarding Musk's musings on privatization.