Elon Musk explains funding plans for taking Tesla private
Saudi Arabia has been pitching him on the idea for two years.
When Elon Musk said he was seriously looking at taking Tesla private, he still left a few open questions. Why did he decide to not only disclose it with a tweet, but shout "funding secured" from the rooftops? He's now offering an explanation -- not that it'll make everyone happy. In a blog post, Musk claimed that it "wouldn't be right" to limit talks of going private to just the largest investors. The tweets kept everyone in the loop, he said. He also insisted that he was speaking for himself as a "potential bidder" for his company.
He also confirmed rumors of Saudi Arabia's involvement, and suggested they'd played an integral role in the news. The country's Public Investment Fund had brought up going private "multiple times" starting in early 2017, he said, expressing interest in the move as a way to reduce its dependence on oil. The fund's managing director "strongly expressed" a desire to back Tesla going private in a meeting on July 31st, and he reiterated that support after Musk's tweets. As far as Musk was concerned, it was just a matter of when Tesla got the money for going private.
The founder simultaneously tried to calm anxieties over the deal. Tesla would provide full details on going private before it asked anyone to make a decision. He also rejected ideas that it would take over $70 billion to clinch the deal. The $420 price he quoted would only apply to shareholders on the way out, not those sticking with Tesla. Only two thirds of shares would carry over, according to Musk, and it would be paid for through equity rather than debt.
The post could mollify investors worried that Musk had talked about going private purely on a whim. However, it's not likely to satisfy SEC investigators looking into whether or not Musk's tweets were legal. Regulators are concerned that Musk might have broken the rules if he'd tweeted without telling investors to expect news from his Twitter account. If he had, all those advanced talks might not matter.
