Elon Musk Confirms Bid to Take Tesla Private

Elon Musk

It all started with a Tweet.

Elon Musk, Tesla’s CEO, shocked the world last week when he casually tweeted on his personal Twitter page that he was considering taking Tesla (NASDAQ:TSLA) private. This news isn’t shocking, as Musk and Tesla have been under serious scrutiny over the company’s slow rollout of its Model 3. 

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Rumors have been flying around the media and Musk has decided to formally address his tweet via the Tesla website.

Musk Responds to Rumors

Posted yesterday, Elon Musk wrote in the company’s blog addressing the talk of taking Tesla private. On August 2nd, Musk claims that he notified Tesla’s board that he was considering taking the company private at $420 per share. At the time, that was a 20% premium over the share price of $350.

Musk didn’t take to Twitter until after all members of the board were notified and after various meetings with said board members. A full board meeting was held where musk explained why going private could be in Tesla’s long-term interest. 

Musk said:

“At the end of that meeting, it was agreed that as a next step, I would reach out to some of Tesla’s largest shareholders. Our largest investors have been extremely supportive of Tesla over the years, and understanding whether they had the ability and desire to remain as shareholders in a private Tesla is of critical importance to me. They are the ones who believed in Tesla when no one else did, and they are the ones who most believe in our future. I told the board that I would report back after I had these discussions.”

Funding Secured

After his initial tweet, Musk responded and said, “funding secured.” The tweeted response then sparked a ton more rumors, and he has decided to clear those up as well.

The CEO explains that two years ago, the Saudi Arabian sovereign wealth fund approached musk on multiple occasions asking to take the company private. Musk explained that the fund has enough capital to execute the transactions.

Recently, the Saudi fund bought almost 5% of Tesla’s stock through the public market and reached out to the exec for another meeting to discuss taking Tesla private. Musk explains that by his estimation only two-rds of shares owned by all current investors would most likely roll over into a private Tesla.

Musk ends the post by saying, “If the board process results in an approved plan, any required regulatory approvals will need to be obtained, and the plan will be presented to Tesla shareholders for a vote.”

Featured Image: twitter