Doubts grow over Elon Musk’s master plan to take Tesla private

Flags fly over the Tesla Inc. Gigafactory 2 which is also known as RiverBend a joint venture with Panasonic to produce solar panels and roof tiles in Buffalo New York

Flags fly over the Tesla Inc. Gigafactory 2 which is also known as RiverBend a joint venture with Panasonic to produce solar panels and roof tiles in Buffalo New York

Tesla stock closed Tuesday at $379.57.

Musk said on Twitter on Tuesday that he was considering taking the loss-making electric carmaker private at $420 (325.4 pounds) a share, which would value a deal at more than $70 billion.

Musk later clarified in a blog post that "a final decision has not yet been made", while touting the benefits of running a private company away from the "enormous pressure" of Wall Street's quarterly earnings cycle. Shares rocketed up 11 percent after Musk's grand reveal Tuesday, with some expecting they would hit $420 - the price Musk had promised shareholders would receive once the company had finalized its go-private transformation.

Earlier today, Elon Musk did what he does best and set the internet ablaze - this time, based on a tweet about potentially taking Tesla private again.

"Last week, Elon opened a discussion with the board about taking the company private", six directors on Tesla's nine-member board said in a statement. Board members met several times and also addressed funding for the move, according to the statement.

But as the dust settles on Musk's latest Twitter escapade, questions remain over whether the Tesla chief executive broke SEC guidelines by tweeting the news. He also stated that this is not an attempt to assume more control over his company - Musk owns approximately 20 percent of Tesla right now, and he doesn't see that changing after the company goes private.

Musk's tweets caused a flurry of activity in financial markets.

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'Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company.

Taking Tesla private would also free Musk from his tumultuous relationship with Wall Street as a whole, which had been consuming a significant portion of his time as well as a significant amount of all news surrounding the automaker.

The Tesla board responded to the proposal earlier Wednesday morning, indicating that it is evaluating things.

Most analysts were skeptical, but some said a deal could materialize if Musk succeeded in lining up the right funding.

Two of the potential stumbling blocks to Musk's plan include the stock price premium not being enough to get the existing shareholders on board to support the sale and coming up short on the announced funding to complete the transition.

The six board members who issued the statement on Wednesday included James Murdoch, chief executive of Twenty-First Century Fox Inc. and Brad Buss, who was the chief financial officer of solar panel maker SolarCity until it was bought by Tesla in 2016.

China's Tencent Holdings Ltd (0700.HK), which took a 5 percent stake in Tesla a year ago, could also be a possible partner. The move is estimated to require north of $50 billion to buy out the public shareholders.

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