Elon Musk isn't kidding, Tesla board confirms TSLA could go private

Tesla chief executive Elon Musk suggested this week he plans to take the electric carmaker private. Did he mean

Elon Musk is serious enough in his publicly-stated interest about taking Tesla private that the board of directors has already discussed the matter several times.

Tesla has moved to further formalise the prospect of the electric vehicle company undergoing a buyout with a statement from the company's directors.

Tesla spokesmen didn't immediately respond to requests for comment on Wednesday. In a note to clients, Bernstein analyst Toni Sacconaghi asked: "What does Musk mean by "funding secured"?"

Investors also seemed to be hesitant of the deal.

Tesla's chief executive Elon Musk met with SoftBank CEO Masayoshi Son in April 2017 about the Japanese investment firm assisting in taking Tesla private, Bloomberg reported Wednesday.

Tesla stock, which has been on the rise for days, skyrocketed after the tweet and ended Tuesday up 11%.

Musk also said he intends to give Tesla's existing shareholders the option of retaining a stake in the company through a special fund, if they want.

Musk has downplayed the power of the tweets he launches at all hours to his 22 milion Twitter followers: "My tweets are literally what I'm thinking at the moment, not carefully crafted corporate bs, which is really just banal propaganda", he said in June. He said funding was "secured", without elaborating.

Tesla board mulls de-listing plan

No board member has come forward to back the plan. Tesla is a legendary cash-burner, with roughly $10 billion in debts and $2 billion in reserves, and Musk would probably need in the tens of billions of dollars to buy out shareholders at the right price.

According to his email to employees, the company will allow its current public shareholders to become private shareholders if they choose against a buyout.

Musk owns an nearly 20 per cent stake in Tesla, meaning he'd still need roughly $70 billion in financing to take Tesla private.

The six board members who issued the statement on Wednesday included James Murdoch, chief executive of Twenty-First Century Fox Inc. and Brad Buss, who was the chief financial officer of solar panel maker SolarCity until it was bought by Tesla in 2016.

Mr Musk said in his tweet on Tuesday that shareholders would be offered $420 (£326) per share, valuing the business at more than $70bn.

Investors have also questioned why the maneuver was not listed in a 69-page SEC filing, submitted last week and released Monday, that provided intricate detail of Tesla's financial outlook and coming events.

"Distraction or not, the move feels right even if Musk is downplaying how supportive public markets have been". "Your disclosures should create certainty in the market so that everyone has a fair and complete understanding of what is going on", Goody said.

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