Tesla board mulls de-listing plan

Danny Moloshok  Reuters

Danny Moloshok Reuters

Ford Executive Vice President Jim Farley on the benefits of being a public company after Tesla CEO Elon Musk tweeted he is considering taking his company private. "This included discussion as to how being private could better serve Tesla's long-term interests, and also addressed the funding for this to occur", the statement said. The board has met several times over the last week and is taking the appropriate next steps to evaluate.

The most obvious equity partners for Musk would be a sovereign wealth fund such as Saudi Arabia's Public Investment Fund (PIF), which sources said on Tuesday had taken a stake of just below 5 percent in Tesla, or a major technology investment fund such as SoftBank Group Corp's Vision Fund, bankers said.

If the content of Musk's tweet was not true, lawyers argue, it could expose Tesla's mercurial chief executive officer and the company to regulatory action and private lawsuits.

Musk took Tesla shareholders and the stock market by surprise on Tuesday by announcing on Twitter he was considering taking the loss-making electric car-maker private at $420 USA a share. Shares were down 3 percent in premarket trading after closing up 11 percent at $379.57 on Tuesday.

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

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At Elon's target buyout price of $420 per share, that would put the company's outstanding share value at somewhere around $69 billion - two numbers that, given Elon's taste in jokes, are probably very intentional. "And if you stay as a shareholder you get less information than before and you depend more and more on Elon Musk".

On Wednesday, Tesla's board said it was evaluating the proposal.

Most analysts were skeptical, but some said a deal could materialize if Musk succeeded in lining up the right funding.

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. Musk's money-losing and cash-burning company is an unlikely candidate for debt investors to be willing to help go private.

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".

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