Here's what taking Tesla private means for the company and Elon Musk

Marco Green
August 8, 2018

One day after Tesla CEO Elon Musk raised the idea that he may take the electric car-maker private, Ford EVP Jim Farley says his company has no issues with being public.

As Tesla's board of directors rallied Wednesday behind chief Elon Musk's extraordinary push to take the all-electric automaker private, a growing contingent of investors, analysts and former regulators voiced their doubts that the deal would ever take off.

They said this "included discussion as to how being private could better serve Tesla's long-term interests".

The board members said they were "taking the appropriate next steps" to evaluate the proposal.

The oil-rich kingdom of Saudi Arabia's investment fund has gobbled up a multibillion-dollar stake in the company in recent months, the Financial Times reported Tuesday, but Tesla has not answered questions about the involvement of the kingdom, or anyone else, in how he would finance the company's exit from public markets.

Several securities attorneys told Reuters that Musk could face investor lawsuits if it was proven he did not have secure financing at the time of his tweet.

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

Tesla's shares were down less than one per cent at $376.31 USA in morning trading on Wednesday after closing up 11 per cent at $379.57 U.S. on Tuesday.

On Tuesday morning, Musk emailed a statement to Tesla employees.

The "short burn of the century" that Elon Musk promised back in May might have finally happened. In his first tweet he said funding was secured but provided no details. "And if you stay as a shareholder you get less information than before and you depend more and more on Elon Musk".

Six members of Tesla's board of directors issued a statement Wednesday, acknowledging that discussions have been ongoing since last week about going private.

The statement by the board, published by NASDAQ, confirms that the proposal is under serious consideration.

Former SEC chair Harvey Pitt told CNBC that while the U.S. stock market regulator permits executives of publicly listed companies to use social media to make statements about their businesses, Musk's tweet was still "highly unprecedented".

Other reports by Click Lancashire

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