Tesla CEO Musk says Saudi fund wants to take company private

Sean Reid
August 13, 2018

Tesla CEO Elon Musk confirmed reports on Monday morning that the Saudi Arabian sovereign wealth fund purchased a stake in the company worth almost 5 percent and held discussions with Musk about taking the company private.

Elon Musk on Monday offered up details on his surprise tweet last week that he had "secured" funding to take Tesla private. According to the blog, the fund first met with Musk in early 2017 to discuss going private again, and the two parties met multiple times thereafter.

Why did I make a public announcement?

"When you have these grand-vision companies, the founders - these leaders - don't want to have some investors have control", Gene Munster, a managing partner at venture capital firm Loup Ventures said in a Bloomberg TV interview, talking about the idea that Musk wouldn't want to bring in any large new shareholders. "However, it wouldn't be right to share information about going private with just our largest investors without sharing the same information with all investors at the same time", Musk wrote.

He wrote that in the blog and the August 7 tweet that he was speaking for himself as a potential bidder for the company.

In one of the two lawsuits, which was filed in federal court in San Francisco by Kalman Issacs, the plaintiff contends Tesla and Musk "embarked on a scheme and course of conduct to artificially manipulate the price of Tesla stock to completely decimate the company's short-sellers". It also reflects the fact that Tesla, once the clear leader in the electric-car market, is facing increasing competition and has yet to deliver on its mass production ambitions. The country's Public Investment Fund, which has built up a stake of nearly 5 per cent in Tesla in recent months, is exploring how it can be involved in the potential deal, according to Bloomberg. They then held several additional meetings with me over the next year to reiterate this interest and to try to move forward with a going private transaction.

"I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving", he continued. "I understood from him that no other decision makers were needed and that they were eager to proceed", Musk wrote in the blog.

The revelation comes days after Musk's claim in an August 7 Twitter post that financing for a deal to take Tesla private had been "secured".

Some analysts have suggested that Musk could convince Tesla's top shareholders, such as Fidelity Investments and China's Tencent, to roll their equity stakes into the deal, thereby significantly reducing the amount of money needed to be raised.

These pieces of news pushed Tesla's share price around 12 per cent higher, although most of those gains have since disappeared as reports emerged from The Wall Street Journal and Bloomberg stating the US Securities and Exchange Commission (SEC) had sent a formal enquiry to Tesla about its funding claims.

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