This article originally ran in Term Sheet, Fortune’s newsletter about deals and dealmakers. Sign up here.
It was the tweet heard ‘round the world: “Am considering taking Tesla private at $420. Funding secured,” Tesla CEO Elon Musk tweeted on Tuesday.
Minutes later, chaos ensued, shares rose, and frantic reporters scrambled to figure out what was going on. But you might be surprised to learn that this isn’t the first time Musk has talked about taking Tesla private. Let’s deconstruct.
Wait, what? Though some speculated that the tech billionaire was joking, it seems he could be serious about taking Tesla private. At $420 a share, the company would have an enterprise value of about $82 billion, including debt. In order to take Tesla private, Musk would have to pull off the largest leveraged buyout in history.
Why would he do this? Tesla is the most shorted stock in the history of the stock market — and Musk doesn’t like that. In a letter to employees, he outlined some of the reasons for his decision. “The reason for doing this is all about creating the environment for Tesla to operate best,” he wrote. “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.” Quarterly earnings reports, Musk adds, may distract from the long-term picture.
Who would the investors in the deal be? Musk’s first tweet came less than an hour after the Financial Times disclosed that Saudi Arabia’s Public Investment Fund had amassed a stake of 3 to 5% this year, which makes it one of Tesla’s largest investors. That stake would be worth approximately $2 billion. But nothing is confirmed and other speculation is that the funding could come from SoftBank or Tencent.
Is this likely? According to an analyst at Bloomberg Intelligence, the buyout is “highly unlikely” because “funding $50 billion plus for a negative free cash flow business would be difficult, if not extraordinary.” But if it does happen, it shouldn’t come as a surprise. For those paying attention, this is something Musk has been thinking about for a while. In a November 2017 Rolling Stone profile of Musk, he said, “I wish we could be private with Tesla. It actually makes us less efficient to be a public company.”
What are some lingering questions? Well, there are a lot. Here’s a good list of some of the most pertinent.
Whatever happens, this wild ride will be one to watch.