Elon Musk claims Saudis would help him take Tesla private

Elon Musk claims Saudis would help him take Tesla private

Tesla (TSLA.O) Chief Executive Elon Musk said on Monday he was still in talks with potential backers of a possible buyout of the company, including Saudi Arabia's sovereign wealth fund, but had not completed securing the funding.

That meeting inspired Musk's "funding secured" tweet last week that said he was "considering taking Tesla private" at $420 a share, he wrote.

"I left the July 31st meeting (with the fund) 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", Musk said.

In one of the lawsuits, the plaintiff Kalman Isaacs said Musk's tweets were false and misleading, and together with Tesla's failure to correct them amounted to a "nuclear attack" created to "completely decimate" short-sellers.

"My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla", Musk wrote, implying that a buyout might require between $20 billion and $30 billion in cash. The fund itself has not publicly commented on the possibility of a deal.

Following the announcement of Tesla's plans to potentially go private and reports that Saudi Arabia's sovereign wealth fund had amassed a 5% stake, shares surged as high as $389 - a new record. Musk and SoftBank Group's Masayoshi Son held talks previous year that touched on taking Tesla private, two people with knowledge of the talks have said. Musk wrote that since August 7, the fund's managing director has expressed support subject to due diligence.

The lawsuits filed by Isaacs and William Chamberlain said Musk's and Tesla's conduct artificially inflated Tesla's stock price and violated federal securities laws.




"This is why I referred to "funding secured" in the August 7th announcement".

The transaction would be structured with equity so as not to burden Tesla with crushing debt, Musk added. It is appropriate to complete those discussions before presenting a detailed proposal to an independent board committee.

At least two investors have sued Musk and Tesla alleging share-price manipulation.

Tesla CEO Elon Musk wants to take the company private.

Therefore, reports that more than $70B would be needed to take Tesla private dramatically overstate the actual capital raise needed.

Musk took to Twitter last week, as he does, to propose a $72 billion deal to take Tesla private, arguing it would help the company focus more on long-term goals than hitting quarterly results and would shield it from short-sellers. "So the potential investor must be patient and strategic-looking".

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