Aug. 13, 2018—If auto manufacturer Tesla goes private, as CEO Elon Musk has recently discussed, it could shake up how the auto industry does business, along with how much it earns, according to a recent report by thestreet.com.
Last week, Musk made a pledge on Twitter to take Tesla private. Last Tuesday, Musk tweeted “Am considering taking Tesla private at $420. Funding Secured.”
A few hours later, Musk sent a letter to all Tesla employees, adding “a final decision has not yet been made, but the reason for doing this [making the company private] is all about creating the environment for Tesla to operate best.”
In the 4-hour time span in which those messages were sent, Tesla’s stock price increased by $16, rising to $379. Berenberg analyst Alexander Haissel says automakers could be forced back to the drawing board on their profit and investment plans in reaction to Tesla’s potential move.
“For the traditional OEMs, a privately held Tesla exacerbates several problems,” Haissl told thestreet.com. “Firstly, the company will be much better placed to execute its expansion plans, such as in China and Europe. … That means Tesla competitors may have even less time to produce viable alternatives, or risk losing significant market share.”