Elon Musk says taking Tesla private is 'best path forward'
Aug 09 2018
Tesla CEO Elon Musk is seeking relief from the pressures of running a publicly held company with a US$72 billion (NZ$108 billion) buyout of the electric auto maker, but he may be acquiring new headaches with his peculiar handling of the proposed deal.
Elon Musk announced the bombshell move Tuesday on Twitter, writing that he had secured funding to buy Tesla Inc.'s shares at $420 each.
Tesla chief executive Elon Musk tweeted yesterday that he had secured funding for the plan.
If the company went private, employees and shareholders would be given an opportunity to sell or buy their stock approximately every six months.
JPMorgan analyst Ryan Brinkman said he gave only a 50 per cent probability that Tesla would go private. "Funding secured", the message from Musk, sent out nonchalantly on Tuesday afternoon, stated.
Just last week, he revealed he had been working 110 hours a week to deliver on short-term promises he had made to Wall Street, a load he traced to his boorish behaviour toward two analysts earlier this year.
The deal would be the biggest leveraged buyout of all time, beating the $45 billion record set by Texas power utility Energy Future Holdings. He announced to the investment world via Twitter on Tuesday, "am considering taking Tesla private at $420". Tesla also would likely need to borrow billions more to help pay for its ambitious plans of its electric vehicle line and its battery manufacturing plants.
SoftBank is now not interested in a deal for Tesla after earlier this year taking a stake in General Motors Co's self-driving unit, Cruise, Reutersreported earlier on Wednesday.
Bloomberg's Selina Wang and Giles Turner reported that Musk and Son failed to reach an agreement over the structure of the company, citing sources. He believes the company will be in a better position to succeed if it's privately held.
There still are near-term execution risks around ramping up Model 3 production and the ability to generate cash, Jonas believes.
Mr Musk has feuded publicly with regulators, critics, short sellers and reporters, and some analysts suggested that less transparency would be welcomed by Musk.
Other board members mentioned in the statement included Robyn Denholm, Ira Ehrenpreis, Antonio Gracias and Linda Johnson Rice.
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.