Here's what taking Tesla private means for the company and Elon Musk

Here's what taking Tesla private means for the company and Elon Musk

Here's what taking Tesla private means for the company and Elon Musk

Tesla stock, which has been on the rise for days, skyrocketed after the tweet and ended Tuesday up 11%.

Midway through the trading session in NY on Wednesday, Tesla shares were down 5% at $374 after surging 11% on Tuesday.

They said the board also addressed the issue of how to fund such a deal, but gave no details.

Tesla CEO Elon Musk tweeted Tuesday that he's is mulling taking Tesla private at US$420 a share.

Elon Musk and Masayoshi Son held talks past year about SoftBank Group Corp. investing in Tesla Inc., including potentially taking the electric carmaker private, according to two people with knowledge of the discussions.

Tesla Inc.'s board confirmed it knew last week about Elon Musk's proposal to take the electric-car maker private, adding credence to the idea that this was more than a spur-of-the-moment whim from the notoriously impulsive billionaire.

Musk laid out his reasoning for going private in an email to Tesla employees yesterday, which was subsequently posted on Tesla's website.

The board members said they were "taking the appropriate next steps" to evaluate the proposal. He now owns 20 percent of the company, so more than $60 billion is needed to buy the business from public shareholders.

The oil-rich kingdom of Saudi Arabia's investment fund has gobbled up a multibillion-dollar stake in the company in recent months, the Financial Times reported Tuesday, but Tesla has not answered questions about the involvement of the kingdom, or anyone else, in how he would finance the company's exit from public markets.

If Musk didn't actually have financing secured when he said he did. oh boy.

Musk's proposed move is seen as a strategy to avoid several issues: Wild stock swings, short-sellers who profit on stock value drops and shareholder pressure on quarterly performance, according to the Financial Times.

"I suspect the corporate lawyers are scrambling right now and hoping the SEC doesn't go after him and the company, because it could be viewed as a statement from Tesla", Peter Henning, a professor at Wayne State University Law School specializing in securities law, explained to the Detroit Free Press regarding Musk's tweet on Tuesday.

Elon Musk, founder, CEO and lead designer at SpaceX and co-founder of Tesla, speaks at the International Space Station Research and Development Conference in Washington, U.S., July 19, 2017. "And if you stay as a shareholder you get less information than before and you depend more and more on Elon Musk". In his first tweet he said funding was secured but provided no details.

SoftBank is now not interested in a deal for Tesla after earlier this year taking a stake in General Motors Co's (GM.N) self-driving unit, Cruise, Reuters reported earlier on Wednesday. Tesla is a legendary cash-burner, with roughly $10 billion in debts and $2 billion in reserves, and Musk would probably need in the tens of billions of dollars to buy out shareholders at the right price.

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