Tesla board mulls de-listing plan

Jeannie Matthews
August 9, 2018

But if the buyout flops, Musk and Tesla will likely face class-action lawsuits from shareholders alleging they were duped, and potential legal trouble from the Securities and Exchange Commission, too.

Tesla didn't respond to requests for comment on Wednesday. Funding secured, " Musk tweeted, without elaboration or any corroboration from the company.

SoftBank has previously invested in Uber, Nvidia and GM's Cruise.

Musk is already CEO of another private company: SpaceX.

There is no reference to Musk's Twitter account on the company's investor relations page under "investor communication", although Tesla's Twitter feed is included. Elon Musk's net worth is tied directly to Tesla's stock price, and according to the Bloomberg Billionaire Index, he theoretically made $1.43 billion on the day. "And if you stay as a shareholder you get less information than before and you depend more and more on Elon Musk".

JPMorgan analyst Ryan Brinkman said he gave only a 50 per cent probability that Tesla would go private.

Even for Musk, who is famous for firing out controversial tweets, Tuesday's message about possibly taking Tesla private astounded the Internet.

Net net, Rusch reiterates an Outperform rating on Tesla shares, with a price target of $385, which represents a slight upside potential from current levels.

"If Apple wanted to be in the vehicle business, this is how you do it-you step up, doesn't have to be $420 (per share), it could be another price". On the basis of both the total dollar amount, and the fact that Tesla has yet to turn a profit, the deal would be "unprecedented" in the annals of public companies going private, Barron's notes.

An image of a Tesla model X is seen reflected on the hood of a new model 3 in the Tesla showroom in Santa Monica Calif. on Wednesday Aug. 8 2018
An image of a Tesla model X is seen reflected on the hood of a new model 3 in the Tesla showroom in Santa Monica Calif. on Wednesday Aug. 8 2018

The deal would be the biggest leveraged buyout of all time, beating the $45 billion record set by Texas power utility Energy Future Holdings.

"Am considering taking Tesla private at $420".

Buying Tesla in its entirety would cost US$72b, based on the company's outstanding stock as of July 27. Tesla was trading around $300 per share in April 2017 when the talks reportedly fell through.

Musk also wants Tesla's employees to remain shareholders.

"What does Musk mean by 'funding secured?"' asked Toni Sacconaghi, an analyst at Bernstein who has always been bearish on Tesla shares.

He said that would allow Tesla to "operate at its best, free from as much distraction and short-term thinking as possible". He believes the company will be in a better position to succeed if it's privately held. Korus said he would need more details from Musk to judge whether a buyout offer would be practical and at what price it would be attractive.

Elon Musk's tweets early on Tuesday caused plenty of speculation and controversy.

Those who believe Musk is carrying out a vendetta against short sellers may point to a May 4 tweet suggesting he might have something up his sleeve.

A statement was issued by six members of the electric carmaker's board after Mr Musk tweeted to say he had the funding to de-list the company.

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