Last week saw quite the storm of activity when Elon Musk announced that he wanted to take Tesla private again and had “secured” the multibillion-dollar funding for it. Now, he’s written another blog post to clarify the situation, though it’s at odds with a separate report from this past weekend.
Musk on Monday posted on Tesla’s website to explain what’s been happening behind the scenes as Tesla potentially prepares to go private. The timeline begins on Aug. 2, when Musk told the board that he wanted to take Tesla private. The board held a meeting (without Musk or his brother Kimbal, who is also a board member), and Musk said he would reach out to some of Tesla’s biggest investors to further discuss the issue.
That blog post appears to name Saudi Arabia’s sovereign wealth fund, the country’s investment vehicle, as being responsible for the funding that Musk said was “secured” in his tweet. According to the blog post, the fund first met with Musk in early 2017 to discuss going private again, and the two parties met multiple times thereafter. The most recent meeting took place on July 31, after the Saudi fund had accumulated a minority stake of about 5 percent.
What’s interesting about this situation is that Reuters has some sources alleging the opposite. On Saturday, Reuters reported that, according to its sources, Saudi Arabia’s Public Investment Fund (PIF) had “no interest” in financing Tesla’s return to private ownership. When asked for comment, a Tesla spokesperson said to refer to Musk’s blog post. However, another, more recent report from Bloomberg claims that the PIF is, in fact, talking about funding the buyout.
It wouldn’t be wise for Musk to lie about something like this right now. Last week, it was reported that the US Securities and Exchange Commission (SEC) was looking into Tesla following Musk’s tweets about taking the company private. If the funding wasn’t actually secured when Musk said it was, he could end up in hot water with the feds. Thus, it would be a strange time to double down on these assertions if they weren’t true.
Late Monday, fueled the discussion further by tweeting that he was “excited” that Silver Lake and Goldman Sachs were working as financial advisors to take the company private.
We’re still a ways away from any of this coming to fruition, though. Per Musk’s blog post, the board still needs to put together a plan that it can agree upon, at which point it will be offered up to a shareholder vote. Only once the shareholders approve the plan can it proceed. Until that happens, Musk said he’ll keep talking to investors and advisors about the best way to go forward.
Taking Tesla private could provide some serious peace of mind to Musk. He’s already laid out his reasons for going down this road. The company wouldn’t need to place a heavy focus on short-term quarterly reports, so it could shift priorities toward long-term strategies that might not carry any immediate payoff. It would also stop the “shorts” from attempting to profit off a potential fall in Tesla’s share price. Musk has railed against these investors on Twitter for some time, going so far as to assert that Tesla is the most shorted company in the history of the stock market.