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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. Musk set a price of $420 a share, substantially above the stock's current trading price and Tesla's all-time closing high of $385 a share.

Tesla said on Wednesday the discussions had addressed the issue of how to fund such a deal, but gave no details.

Tesla shares fell as much as 3.4 per cent to US$366.52 before the start of regular trading, though they pared declines after the board statement.

Jonas wrote that he understands Musk's desire to avoid the pressures of quarterly earnings as a public company.

Teresa Goody, a former SEC official, said Musk "did something inappropriate and caused chaos in the market" in a way that would likely draw scrutiny from investigators.

Six of nine members said in a prepared statement Wednesday that Musk began talking with the board about the move last week.

Musk has 22.3 million followers on Twitter, and Tesla's share price was already rising after the Financial Times reported that Saudi Arabia's sovereign wealth fund had taken a $2bn stake in the company.

Some Wall Street analysts were skeptical of Musk's ability to gather the huge financial backing to complete such a deal, given that Tesla loses money, has $10.9 billion (8.5 billion pounds) of debt and its bonds are rated junk by credit ratings agencies.

Tesla's CEO also laid out what he envisions as the ideal path for going private.

Tesla stock opened at $369.09 on Wednesday, sliding almost 3 percent from its Tuesday closing price of $379.57.

Some on Wall Street shared that view. Many initially thought it was Elon Musk's attempt at a bad joke about marijuana, because "420" has always been associated with pot. There are no active talks between the companies now, said the people, who asked not to be identified discussing private deliberations. He also stated that this is not an attempt to assume more control over his company - Musk owns approximately 20 percent of Tesla right now, and he doesn't see that changing after the company goes private. Musk has feuded publicly with regulators, critics, short sellers and reporters, and some analysts suggested that less transparency would be welcomed by Musk.

The statement was not from the company's full board of directors. Tesla's other board members are Musk, his brother Kimbal Musk and venture capitalist Steve Jurvetson.


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