Published: Wed, August 08, 2018
Finance | By Jaime Brady

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

"Having complex stakeholders is great", Farley said in response to a question about being public vs. private from FoxNews.com Automotive Editor Gary Gastelu at Ford's headquarters in Dearborn, Michigan. He wants every shareholder to have the option to stay with the company as private investors.

Tesla's chief executive Elon Musk met with SoftBank CEO Masayoshi Son in April 2017 about the Japanese investment firm assisting in taking Tesla private, Bloomberg reported Wednesday.

"We've been in existence for over 100 years-we've always had complicated stakeholders - and that's what makes our company great and vibrant", he said. "I'm trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible". Among these issues, short-sellers have especially posed a continuous problem for Tesla, and it's no surprise Musk would like to put an end to the roller coaster that their actions can cause, with him highlighting the view that Tesla is one of most shorted companies on Wall Street. Saudi Arabia's Public Investment Fund, a major backer of the Vision Fund, has built a $2 billion stake in Tesla already.

Trading in Tesla was halted for an hour and a half on Tuesday afternoon, by which time the stock had soared to $370.

The board members said they were "taking the appropriate next steps" to evaluate the proposal.

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"Most of the obvious funding sources for Tesla's take-private transaction are foreign-based", Toni Sacconaghi, an analyst at Sanford C. Bernstein & Co., wrote in a note.

Former SEC chair Harvey Pitt told CNBC that while the United States stock market regulator permits executives of publicly listed companies to use social media to make statements about their businesses, Musk's tweet was still "highly unprecedented". But going private could also complicate Tesla's effort to build a mainstream electric vehicle by removing the easy access to capital the Wall Street darling has enjoyed.

Any buy-out would require a shareholder vote.

Tesla spokesmen didn't immediately respond to requests for comment on Wednesday. Many initially thought it was Elon Musk's attempt at a bad joke about marijuana, because "420" has always been associated with pot. He followed up the tweet with an email to Tesla employees saying that he thought "the best path forward" would be to take Tesla private.

Days after Tesla opened up the Model 3 configurator to all potential buyers, not just reservation holders who got a place in line over a year ago, uncomfortable math lingers over the automaker's.

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