Tesla CEO Musk taunts short sellers amid legal scrutiny

Dwayne Harmon
August 13, 2018

Tesla Inc. CEO Elon Musk says he's in talks with the Saudi Arabian sovereign wealth fund about taking the electric vehicle and solar panel maker private, but no deal has been finalized.

Musk's disclosure, made in a blog post on Tesla's website, comes six days after the Silicon Valley billionaire shocked investors with a post on Twitter saying he was considering taking Tesla private at $420 a share and that funding was "secured".

"My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla", Musk wrote, implying that a buyout might require between $20 billion and $30 billion in cash. "I understood from him that no other decision makers were needed and that they were eager to proceed". The fund has recently built a stake just shy of 5 percent in Tesla. Musk and SoftBank Group's Masayoshi Son held talks previous year that touched on taking Tesla private, two people with knowledge of the talks have said.

Reuters reported on August 11 that the PIF has shown no interest so far in financing Musk's proposed deal, while CNBC said on August 9 that Musk previously talked with the Saudi fund about a take-private deal, citing one person familiar with the matter.

The SEC has asked Tesla if Musk had facts to back up his claim on Twitter that funding is "secured", people familiar with the regulator's inquiry told the Wall Street Journal last week. It is appropriate to complete those discussions before presenting a detailed proposal to an independent board committee.

Airline mechanic steals a plane from Seattle airport and crashes, officials say
Unverified video footage on social media showed a large plane flying above the Seattle area with an F-15 following it. After the plane approached Ketron Island , Waldron saw a thick column of smoke followed by a loud explosion.

Korea slams USA officials for sanctions
The fresh anger out of Pyongyang comes as top diplomats from the U.S. have strongly criticised the North's commitment to denuclearisation.

Melania Trump's parents take U.S. citizenship oath
The Slovenian immigrants, a former vehicle dealer and textile factory worker, had been living in the USA as permanent residents. In a Tweet last November, Trump slammed CHAIN MIGRATION or bringing families into the United States , calling it truly evil.

While Tesla CEO Elon Musk teased last week about taking the company private, several suitors may have already been courting the electric auto giant months ago.

It is also worth clarifying that most of the capital required for going private would be funded by equity rather than debt, meaning that this would not be like a standard leveraged buyout structure commonly used when companies are taken private.

If it went private, Tesla wouldn't need to worry about catering to its quarterly reports, which could free it up to move faster in other places, like new-car development.

"When you have these grand-vision companies, the founders - these leaders - don't want to have some investors have control", Gene Munster, a managing partner at venture capital firm Loup Ventures said in a Bloomberg TV interview, talking about the idea that Musk wouldn't want to bring in any large new shareholders. Since the series of Tweets and a letter to employees in which Musk laid out his thought process, there has been silence on the topic from both Musk and the company. "The only reason why this is not certain is that it's contingent on a shareholder vote".

Other reports by

Discuss This Article